The king of Quebec

Pierre Karl Péladeau controls the province’s media and its star system. He’s courted by politicians, feared by journalists. How he became Quebec’s most powerful man. Martin Patriquin on Quebecor’s restless titan.

Jean-François Bérubé

In 2003, Quebec actor and writer Louis Morissette co-wrote a two-minute skit parodying Pierre Karl Péladeau. The skit, which aired on Radio-Canada’s year-end send-up Ceci n’est pas un Bye Bye, portrayed the former Quebecor CEO as a money-grubbing cherub enticed by a fairy’s monetary and carnal charms to buy into a get-richer scheme involving Quebecor media properties. “We take 14 nobodies, we have them sign a five-year contract, we don’t pay them and we put their faces on the cover of all the magazines,” titters the fairy. “We won’t call it propaganda, we’ll call it convergence!”

The skit was an obvious dig at Star Académie, an American Idol-style show developed by Péladeau’s wife, Julie Snyder, and at Quebecor’s burgeoning convergence model, in which its content is spread throughout its myriad television and publishing titles. The fairy was a parody of Snyder, played with ditzy aplomb by Morissette’s partner, Véronique Cloutier.

With no nudity, bad language and only one veiled sexual reference, the skit was tame by Quebec standards. Yet by making fun of Péladeau, then one of the biggest publishing names in the world, Morissette made himself a target of what critics of the media baron say are Péladeau’s long memory and thin skin. Morissette’s gig as a host on a Quebecor show was summarily cancelled, even though he’d already signed a contract, and he says he was cut off from all Quebecor projects.

“The program director at Quebecor told me they didn’t like that I made fun of the boss, that they were very shocked by the skit. I was fired because [Péladeau and Snyder] didn’t like the sketch.”

As far as Morissette’s career is concerned, the implications of those two minutes reverberate to this day. A producer as well as an actor, Morissette claims he was placed on Quebecor’s “blacklist” and is regularly shunned from using Quebecor talent on his own productions. Quebecor-owned media titles, he says, either ignore or are harsh toward his work.

Quebecor public affairs vice-president Martin Tremblay denies the existence of a blacklist at the company, and says the cancellation of Morissette’s contract was a “business decision.”

And yet as critical as he is about Pierre Karl Péladeau and his wife, Morissette is keenly aware of their power in Quebec, where their cultural footprint is gargantuan. “It’s too late for me, but if I was managing someone today I would say, ‘Think very carefully about this. Is it really worth making a joke about them? Is it worth being boycotted?’ No. I’d tell them to shut up, go on their television shows, suck up to them, tell them how great they are. Get into the mould, because you don’t have a choice. They are the No. 1 broadcaster, producer, distributor in the province.”

Morissette’s harsh critique and backward praise of Quebecor is hardly unique in Quebec. Outside the province, the Quebecor brand is best known for the struggling Sun chain of newspapers, beset by tumbling circulation and mass layoffs. Yet it is quite a different story at home, where Quebecor looms large over the province, dominating its television (and, increasingly, its cellular) airwaves, cable networks, newspapers, magazines, book publishing, distribution and music industries. Its Journal de Montréal newspaper has a weekly readership of two million—equal to about a quarter of Quebec’s population. Le Journal does well because it consistently nails the zeitgeist of Quebec profond: defensively nationalist, excessively proud and self-consciously wary of political elites.

At the centre of it all is Pierre Karl Péladeau, who despite having stepped down as CEO of Quebecor in May is still its largest shareholder and chairman of its media and television branches. Fifty-one years old and ostensibly retired, the man known simply as PKP is arguably more powerful in Quebec than ever—and just as restless. In April, Quebec Premier Pauline Marois announced his appointment as chairman of Hydro-Québec, the province’s electrical utility and collective source of pride. He is doggedly pursuing an NHL franchise for Quebec City, which is just the kind of big-money, long-odds deal he is used to. He has been on a two-year, 14-stop speaking tour promoting entrepreneurialship throughout Quebec—and slaying the negative image people often have of him in the process, says Quebecor’s Tremblay.

He is Quebec’s (and perhaps Canada’s) most celebrated enigma, a man of seemingly ungulfable contradictions who, many say, has remained purposefully ambiguous on Quebec’s national question to further his own business interests. He is a strong Quebec nationalist—even a sovereignist, perhaps—who launched Sun News, a Maple Leaf-draped cable news outfit that is “as Canadian as you are,” according to a promotional video. It begs the question: who is the real PKP, the man who wields an enormous amount of influence over both politics and culture in Quebec? Few really know—and fewer still inside Quebec dare to ask.

Odd things happen when you write about Péladeau and Quebecor. People in all sorts of industries in Quebec—media, telecom, book publishing, distribution and the like—simply won’t talk, even off the record. Anecdotes about Péladeau’s elbows-out management style are recounted only with the promise that they will be kept off the page. People worry PKP will figure out who talked and either shun or sue them.

Sylvain Lafrance, a former senior Radio-Canada executive who Péladeau sued for defamation in 2007, at first agreed to talk about his legal tussle with PKP. “Pierre Karl and I don’t hate each other as much as people think,” he told me. Five hours later, Lafrance’s assistant abruptly cancelled the interview.

Repeated requests to interview the man himself are literally laughed off by a senior Quebecor VP—who nonetheless invites me to his office to pour poison in my ear about a columnist who critiqued Péladeau in a non-Quebecor title, losing his column shortly thereafter. The columnist wouldn’t talk; he has a book coming out, and worries it will be shunned by Péladeau and Quebecor’s formidable publicity machine. Another journalist at first agrees to tell about his or her firing after crossing Péladeau, but then begs off because of a book deal with a Quebecor-owned publisher.

“PKP’s problem is that many people hate his methods and his publications, but they are completely dependent on him,” says Émilie Dubreuil, a journalist who worked at Le Journal de Montréal. “That is the paradox.” (“Nothing could be further from the truth,” says Quebecor’s Tremblay.)

Perhaps Péladeau would rather let his company speak for itself. Even some of his harshest critics admire how he has transformed Quebecor from an old-world print-and-publishing concern to the model of multimedia convergence it is today, with 2012 sales in excess of $4 billion.

He inherited the company following the 1997 death of his father, Pierre Péladeau—a man with whom he had a fractious relationship. The younger son from Pierre Péladeau’s first marriage, Pierre Karl spent much of his formative years rebelling against his father. At 18, he moved out of the Péladeau mansion in the Laurentians to live with a Journal de Montréal columnist. “He said he didn’t want a goddamn cent from his from his father,” says Bernard Bujold, Péladeau père’s executive assistant from 1991 until the latter’s death. Péladeau entered the business end of the family fold in 1994, though their relations didn’t improve. His father sent him away to Paris to head up Quebecor’s European properties.

“I talked a lot with Pierre Péladeau about his son,” says Bujold, who wrote a book about his time with the father. “He couldn’t talk to Pierre Karl. They fought constantly. There was no dialogue, but he admired his son’s ingenuity and his deal-making ability.”

While he took his father’s 13th-floor office in Quebecor’s Rue St-Jacques headquarters in Montreal, Péladeau the son had a decidedly different outlook from Péladeau senior. Pierre made his fortune by owning both newspapers and the means to print them. His Journal de Montréal, founded in 1964, was (and remains) a blue collar tabloid bible, and Pierre Péladeau maintained his hardscrabble image even after he bought and customized his first Mercedes limousine.

Until 1994, according to Bujold’s book Pierre Péladeau cet inconnu, Quebecor’s head offices had exactly one Internet connection, in his son Érik’s office, which he cobbled together with pieces bought at RadioShack. Érik, Péladeau’s oldest son, convinced his skeptical father in 1994 to invest $20 million to create Quebecor Multimedia.

Yet it was Pierre Karl, not Érik, who took over the company. Though he was a philosophy major in his university years—he changed his name from “Carl” to “Karl” in homage to Karl Marx—Pierre Karl was, at 36, eager to take over the reins of one of Quebec’s largest and most respected companies. Reticent at first—Érik, the mature and grounded eldest son, was then heir apparent—his father warmed to the idea of Pierre Karl taking over after watching him negotiate Quebecor’s 1995 purchase of Financière Jean Didier, a printing company, at a deep discount. But Pierre Péladeau never said anything about succession to Pierre Karl. In fact, says Bujold, the two hardly talked in the months before Pierre’s death in 1997.

Nonetheless, it was obvious who would take over once Pierre passed away. “Érik didn’t have the energy to be the next president of Quebecor even if he was the oldest son of the founder,” Bujold says. “He is a nice guy but he didn’t have the killer instinct. His young brother Pierre Karl had it all and even more.”

As one of his first cost-cutting measures, Péladeau closed the daycare in Quebecor’s Montreal head office. (Though he has since expressed remorse at the decision, it never reopened.) His sister Isabelle, then head of the company’s magazine division, abruptly left the company soon after her brother’s arrival.

“Pierre Karl’s secretary told me that when he got back from Paris in 1997 he didn’t even know how to send an email. A few years later, he was the king of the Internet in Quebec,” says Bujold. He became as much through the canny purchase of the cable company Videotron in 2000. At the time, Videotron was beset by notoriously bad customer service and recalcitrant unions. With the public pension-fund manager Caisse de dépôt et placement du Québec, which invested some $3.2 billion in public funds, Quebecor acquired Videotron and the television network TVA for a $5.4-billion cash-and-share deal.

With these purchases, PKP replicated his father’s vertical integration model for the digital age—though with a hearty nod to Pierre Péladeau’s newsprint-stained legacy. Pierre Karl also bought up a raft of printing presses around the world to form Quebecor World, along with the Sun newspaper chain and a host of other newspaper and magazine titles in Quebec.

According to former prime minister and 14-year veteran of Quebecor’s board of directors, Brian Mulroney, Péladeau saw a business opportunity in converging the disparate cultural outlets in Quebec. By virtue of being French-speaking, most Quebecers are unique in their cultural consumption. The bulk of the province’s television, radio, film and media content is either produced or translated in the province. Effectively, Quebec’s six million francophones are a captive audience.

“In 2000, I brought Pierre Karl to the Four Seasons in New York to have lunch with Bob Pittman, who was one of the founders of AOL, so they could talk about convergence. Pittman concluded that Pierre Karl had already figured out how Quebec is ideal for convergence because of the linguistic dimension,” Mulroney says. In 2010, Péladeau launched Videotron’s wireless network, shaking up a market long dominated by Bell and Rogers, which owns Maclean’s.

Bujold says Péladeau’s relentless focus on Quebec also stems in part from the failure of Quebecor World, which collapsed into bankruptcy protection in 2008 under a mountain of debt (it emerged out of bankruptcy the following year). The experience tempered Péladeau’s enthusiasm to go beyond Canada’s borders, notes Bujold. “He could have done what the Bronfmans did, to get out of Quebec and play the international game, but he didn’t. He seized the limit of his destiny and that thinking saved the business—unlike the Bronfmans, who played too high and gambled too much on glamour and lost almost all,” says Bujold.

Today, Quebecor owns 16 book publishing houses, as well as Archambault, one of the largest chains of French-language CD and bookstores; Select, one of Canada’s largest music distributors; Messageries ADP, the largest distributor of French-language books in Quebec; and Messageries Dynamique, Quebec’s largest print media distributor. With its recent purchase of the magazine La Semaine, the company now owns seven of Quebec’s People-style glossy magazines—the machines that reflect and feed Quebec’s well-developed star system—giving it a virtual monopoly of Quebec’s supermarket checkout aisles.

In television, Morissette’s satirical vision still rings true: Quebecor is home to two of the province’s most popular television shows, Star Académie and La Voix, a French version of the American TV singing competition The Voice. Both are produced by Julie Snyder.

For Quebec’s cultural arbiters, who frequently decry the lack of French-language music on Quebec’s airwaves, the success of Star Académie and La Voix has been vexing. Artists such as Sébastien “Biz” Fréchette of the rap group Loco Locass have complained of how the cast of handsome participants is dumbing down Quebec culture. Yet Star Académie and La Voix have played an undeniable role in the resurgence of French language music in Quebec. Show participants record songs, which invariably become hits on Quebec radio.

Some artists, though, say Snyder’s production company, Productions J, often undercut the writers and performers. “They told us what we’d get paid. We had to sign a waiver renouncing the union’s rate,” said Rudy Caya, lead singer of the rock band Vilain Pingouin. “I was told, ‘If you don’t want to do it, we’ll get someone else.’ And if you are out of Quebecor’s good books it can hurt your career.” Vilain Pingouin appeared on Star Académie in 2009. Fréchette joined the show’s coaching team in 2012.

“No one from our team ever said anything of the sort to Mr. Caya or to Vilain Pingouin,” said Productions J spokesperson Louis Noël, who stressed that Productions J was “independent from Quebecor.” Yet in less than 24 hours, Quebecor vice-president Martin Tremblay knew of Maclean’s questions to Production J regarding Vilain Pingouin.

Even Quebec cultural royalty doesn’t feel immune from the power of Péladeau and Snyder, it seems. In 2011, actor and Parti Québécois MNA Pierre Curzi opposed Bill 204, which prevented legal challenges to a contract between Quebecor Media and the city government for the arena—a key part of Péladeau’s plan to attract an NHL hockey team to the city. Curzi opposed his party’s “anti-democratic” bill because the contract details were kept secret; he and two caucus colleagues resigned as a result.

Curzi is also one of the most celebrated Quebec actors of his generation, having appeared in The Decline of the American Empire and The Barbarian Invasions, among many other films. Yet he says he raised Péladeau’s ire in opposing the Quebecor-friendly legislation, and believes he may have been cut off from Quebecor productions as a result. “We aren’t friends anymore,” Curzi says of Péladeau. “I opposed the deal, that’s fine. I have no problems. But if I had to find work, it would have been complicated. I’m not sure TVA’s going to hire me.”

Quebecor’s Tremblay denied Curzi’s allegations, and noted that Marie Tifo, Curzi’s wife, currently stars in a TVA program.

Wondering whether or not Pierre Karl Péladeau is a sovereignist is practically a parlour game amongst Quebec’s chattering classes. Certainly, sovereignists hope he’s on their side, yet Péladeau himself has forever remained coy on the question, and a look at Quebecor’s business interests doesn’t help the divining.

In 2008, Quebecor announced Projet Éléphant, a project to restore, catalogue and broadcast old Quebec films. The typical business mind would probably balk at investing $14 million, according to Quebecor figures, on such a project. Quebec films have limited commercial appeal in other French-speaking societies and next to none anywhere else. “It helped keep the collective memory of Quebec cinema alive,” says Curzi.

“Pierre Karl Péladeau never hid that he’s a sovereignist. His convictions are sovereignist . . . and then when he started the Sun News Network, everybody was like, ‘What the f--k? Is that just business?’ ” says Curzi.

It’s hard to tell. When Péladeau bought the Sun chain of newspapers in 1998, he proclaimed it “a big day for Canada.” In 2011, Péladeau said the nascent Sun News Network would be an all-Canadian bulwark against the creeping influence of American television. Sun News is Canada’s cable respite for staunch pro-Canadian right-wing populism—everything that Quebec culture isn’t, in other words. In some respects, the network and the Sun chain of newspapers mirror the same free-market principles and general disdain for the left as Quebecor’s French-language properties, like Le Journal de Montréal and the Le Canal Nouvelles cable channel.

Yet the editorial line of Quebecor’s French media properties is strongly Quebec nationalist, if not outright sovereignist. “The Péladeaus have given columns to Bernard Landry and René Lévesque, [former PQ ministers] Lise Payette and Joseph Facal, [convicted FLQ kidnapper] Jacques Lanctôt and Gilles Duceppe. If you are an old sovereignist, we don’t name you to the Senate, because we don’t have one. Instead, you get a column in Le Journal de Montréal,” says the journalist Dubreuil.

According to several former Quebec journalists, Péladeau’s Quebec nationalist side would notably show itself whenever it suited Quebecor’s business interests. In 2009, Péladeau was in a bidding war with the Molson family for the Canadiens hockey franchise. Péladeau ultimately lost out to the scions of the Canadian brewing giant, and an article published in Quebecor’s Journal de Québec noted Péladeau’s “regret” that Canadiens owner George Gillett “preferred financial considerations, while [Péladeau] would have liked the Canadiens to be based on a Québécois identity.”

Péladeau’s dig at the Molson family seemingly played on an old Quebec stereotype: that like many wealthy English families, the Molsons are somehow less Québécois than the French-speaking hoi polloi. According to two former Quebecor journalists who wish to remain anonymous, there was pressure to denounce the Fonds de solidarité FTQ capital fund, a partner (along with Bell) in the Molson deal to acquire the Canadiens. Interviewed separately, the journalists said there was similar pressure to, as one put it, “say the Bell deal wasn’t a Quebec deal but an Ontario deal,” as one put it. (Quebecor’s Tremblay says the allegation is “totally false. Our newsrooms are completely independent and it is up to them to determine the editorial line.”)

Antagonizing the Molson family may not help Péladeau’s bid for an NHL team in Quebec City, which he has been pursuing since his failed bid for the Canadiens. Canadiens owner Geoff Molson is one of 30 NHL governors, who along with commissioner Gary Bettman decide the where and when of league expansion. The deal may not make business sense for Canadiens management, as another Quebec-based team might cannibalize Montreal’s lucrative market, says NHL analyst John Shannon. “It puts Geoff Molson in a tough position. How would a second team play in Quebec? Would they be taking Canadiens dollars?”

In terms of sheer animosity, however, few feuds top that between Quebecor and CBC/Radio-Canada. There is a natural rivalry between the public broadcaster and the television station TVA, which is more populist (and more popular). What became TVA was founded in the 1960s as a scrappy, less haughty alternative to the staid Radio-Canada, which until then had the near-monopoly on Quebec’s ears and eyeballs.

When Péladeau and Quebecor acquired TVA in 2000, Le Devoir television critic Paul Cauchon says, “the rivalry intensified.” Quebecor media properties have attacked the very legitimacy of the CBC, largely spearheaded in French by Journal de Montréal columnist Richard Martineau, who also hosts a show on LCN, Quebecor’s cable news channel. On Sun News Network, the CBC was a regular target of columnist and host Ezra Levant’s derision, both for its public subsidy and the network’s purported leftist bias.

Péladeau himself wrote 12 letters and a handwritten fax to CBC president Hubert Lacroix accusing the public broadcaster of refusing to advertise in Quebecor titles. The letters often included photocopied clippings of CBC advertisements from rival publications. “He’s a micro-manager. He has his nose in everything,” says a former Quebecor journalist.

Quebecor and the CBC have since buried the hatchet somewhat. Starting in March 2012, the two corporations have entered into a series of content-sharing agreements through which Radio-Canada programming would be offered on Quebecor’s various media outlets. Earlier this year, Quebecor and Radio-Canada announced they are teaming up to televise the World Cup and the Sochi Olympics in 2014.

Why would someone so obviously put off by the very existence of CBC/Radio-Canada enter into a deal with the public broadcaster? The official Quebecor explanation was that “Quebecor wants to offer the best programming at the best price to our cable customers,” according to Quebecor VP Martin Tremblay.

Indeed, the deal may well appeal to Péladeau’s Cartesian side. After all, the CBC deal gives TVA access to French-language Radio-Canada Olympic programming, as well as the exclusive French broadcasting rights to June’s FIFA Confederations Cup in Brazil. It seems Péladeau’s noisy feud with CBC was just that: noise. At the end of the day, partnering with the country’s public broadcaster simply made good business sense.

Coincidentally or not, the Sun newspaper chain’s attacks on the CBC have become far less frequent since the content sharing deal. According to a database analysis of Quebecor’s English language titles, the chain published 19 “CBC money drain” features in 2011 alone in its newspapers. Since the Quebecor/CBC deals in March 2012, it has published two.

On May 1, Premier Pauline Marois met with the leaders of Quebec’s three biggest unions in her Quebec City offices to mark International Workers’ Day. The foursome discussed public finances, natural resources and potential changes to the federal Employment Insurance program.

The otherwise humdrum meeting was significant because it was the first time in nine years that a Quebec premier met with union leaders to honour May Day. Under the previous Liberal government, the day often brought street protests. Marois’s event was marked only by a cheery press release and a 25 cent increase of the minimum wage.

Marois’s political embrace of Quebec’s union movement, which historically supports the Parti Québécois, was undercut by a small fact: two weeks before, the premier named Pierre Karl Péladeau chairman of Hydro-Québec. Simply put, Péladeau and Quebec’s unions do not get along, and the resulting public pas de deux has spanned much of Péladeau’s career.

That the premier courts both Péladeau and the unions speaks to the often contradictory political paths of the modern-day Parti Québécois. It also suggests that Péladeau has considerable influence within the sovereignist party.

The position of Hydro-Québec chairman is part-time, ceremoniously powerful and typically filled by ex-politicians or apparatchiks with connections to the ruling party of the day. In announcing the appointment, Pauline Marois said Péladeau approached her with the idea to “serve the state,” as Marois put it, though Pierre Curzi wonders whether it was the other way around.

“She courts him because he’s a big media player, a big industrial player and a political player,” says the actor, who adds that Bill 204 allowed the PQ to both placate Péladeau and capitalize on the hockey-mad fervour in Quebec City, where the party is particularly weak.

Péladeau is useful to the PQ for another reason, according to Curzi. The media tycoon is an ideal counterweight to the Desmarais family, the arch-federalist clan and controlling shareholder of Power Corp., which has close ties to the Quebec Liberal party and owns Le Journal rival La Presse. “The Liberals are very tight with the Desmarais,” Curzi says. “It’s a clash between federalists and sovereignists playing out between two media corporations.”

The consequences of this clash were felt by the then-governing Liberals during last year’s election. “Everyone noted how clear it was that the opinion of Quebecor’s owner was being expressed in Quebecor media properties,” said a senior Liberal campaign source.

As with most things Péladeau-related, his move to Hydro-Québec prompted much speculation. Is it a result of post-retirement restlessness? Is it a stepping stone to political office? Is it, as one columnist suggested, part of his PR campaign? And will he use it as a bully pulpit to stealthily or otherwise shake up Hydro-Québec’s union-dominated structure as he did with Videotron?

“I think he just wants to do other things,” says Brian Mulroney. “He wants to lecture at universities. He wants to run the board of Hydro-Québec. His own father wasn’t a great father, and he wants to be one. And all you need to do is look at the information circular to figure out that the guy doesn’t need any tag days. He’s got $700 or $800 million in Quebecor stock.” (Péladeau’s stock was worth $684 million, according to the latest Quebecor filing.)

The 16-member Hydro-Québec board over which Péladeau presides is almost entirely made up of Liberal appointees, including Michel Plessis-Bélair, vice-chairman of Quebecor rival Power Corp. According to one board member who wished to remain anonymous, the divide between Péladeau and the board is the elephant in the room—“it’s been a bit like walking on eggshells,” the member said—but the meetings have been marked by Péladeau’s professionalism.

“Pierre Karl is aware of all the dossiers, including the negotiations with [Hydro-Québec’s] unions. He presides, he doesn’t question decisions. He asks questions when he thinks something isn’t clear, and does so in a very elegant manner. He has a lot of expertise, and we benefit from his presence,” the board member, a Charest appointee, said. Mulroney echoes the thought. “He’ll be a very good chairman, but he won’t be trying to usurp anybody’s authority at the CEO level. He’s not going in there with a bulldozer.”

Quebecor, Quebecers might be surprised to hear, is a small player as far as Canadian companies go. Its market capitalization—the total value of its shares—is $5.9 billion, or around one-eighth the size of Bell’s parent, BCE, its frequent sparring partner in matters related to hockey and cable. And yet the company has its fingerprints all over Quebec—and despite his recent retirement as Quebecor CEO, Péladeau has a firm grip on the company. There are dark spots: Quebecor’s news media revenue is down, its English newspaper titles are hemorrhaging money and staff, and Sun News Network’s survival is questionable given the recent CRTC decision to not include the channel in Canada’s basic cable packages.

As Mulroney points out, however, Quebecor’s French-language newspaper titles, particularly Le Journal de Montréal, are doing very well. Its cable, telephony and wireless properties—acquired and developed by Péladeau over the last 13 years—are “producing the bulk of Quebecor’s profits,” says the former prime minister. Quebecor also commands much of Quebec’s cultural sphere, as Louis Morissette well knows. The actor has spent much of his career critiquing Quebecor’s ubiquity in all things star-related in Quebec, yet still finds himself in awe of Péladeau’s success. “They [Péladeau and Snyder] are respected, and rightfully so,” he says. “There are many artists who are very, very well served by Quebecor. It’s an extremely efficient machine.”

Morissette has tried a next-to-impossible feat in his daily life: avoiding Quebecor altogether. It hasn’t gone well. He needs cable, for one, and only Videotron serves his neighbourhood. “And my power’s gone out three times since Péladeau arrived at Hydro-Québec,” he says.

Morissette laughs. He’s joking, he swears.