The owner of Métro Média, which has just ceased the publication of several newspapers, collected a large dividend of $2.57 million a few months before the start of its financial difficulties.
Last Friday, the company that owns the newspaper Metro and 16 local newspapers announced the immediate suspension of its activities.
The president, Andrew Mulé, pointed to the blocking of news by Meta, the fall in advertising revenues and the decision of Montreal in April 2022 to ban the distribution of the Publisac, in which several of the newspapers were inserted.
However, a few months before, in the summer of 2021, the main shareholder of Métro Média, Michael Raffoul, paid himself a dividend of $ 2.57 million, learned our Bureau of investigation.
“We had made a lot of profits and I took a dividend, that’s all, defends Mr. Raffoul. When I took the dividend, there was over $1.5M left in the company. I put a lot of money into this business. I did not invest to lose money.
Metro Media’s main shareholder, Michael Raffoul.
Profits during COVID
At that time, the business was indeed very profitable.
In 2020-2021, it had recorded a profit of nearly 30%, or around $4 million, and was on track to profits of nearly $3 million in 2021-2022, show financial documents obtained by our Bureau of investigation.
“We did well during COVID because of wage subsidies and government advertising,” said Raffoul, who was the company’s president and sole shareholder at the time.
The amount of $ 2.57 million is the only dividend he paid himself, he tempers.
However, Messrs. Raffoul and Mulé also received a combined salary of around $26,000 per month, before suspending him in early 2023.
Metro Media President Andrew Mulé says in 2021 there was no certainty the City would go ahead with banning the Publisac.
“Revenues plummeted after the mayor’s announcement [sur le Publisac]. Government advertising also stopped in March 2022. I lost 51.2% of my income,” he says.
The $1.2 million subsidy from the City of Montreal in support of the local press was not enough to compensate for advertising losses, assures Mr. Mulé.
Even before it closed, Metro already planned to cut 16 of its 68 positions to avoid too large a deficit this year.
Towards bankruptcy
Andrew Mulé pleads having sought solutions, by reducing costs, by making a digital shift, but he lacked financial support.
“I did not believe that I could finance a digital transition without government assistance”, judge Michael Raffoul.
Mr. Mulé castigates the Quebec government, which today “remains silent” after committing to support a cooperative model.
On Friday, the Liberal Party of Quebec also demanded that the Legault government grant emergency aid of one million dollars to Métro Média.
For the time being, the press company has not sheltered itself from its creditors and has not declared bankruptcy.
“I’m not there yet, but frankly I don’t see any other avenues at the moment,” drops Andrew Mulé.
