Business

All the news that’s fit to buy

Anthony Whittingham December 10 1979
Business

All the news that’s fit to buy

Anthony Whittingham December 10 1979

All the news that’s fit to buy

Business

Anthony Whittingham

It was by all accounts the most bizarre afternoon The Globe and Mail newsroom has seen in many a year. Newsbreaks, scoops or world crisis may occasionally stir the tempo at Canada’s most “serious” daily newspaper, but the tension in the air last Friday came from an entirely different source: anxiety from within the newspaper itself—like the tremor of fear and excitement sweeping through a hive of bees at the birth of a new and rival queen. Rumors hummed from desk to desk; tight knots of reporters and editors clustered together in urgent conversation. Was the Toronto Globe and Mail about to be sold? And FP Publications—the crossCanada newspaper chain of which the Globe is the flagship paper—was it about to fall into “enemy hands”? Feelings at the Globe seem to run deep. The rumor which had exploded into the open last Friday—that FP is on the verge of being bought out by three Toronto financiers, Conrad Black, John Bassett Sr. and George Gardiner—was greeted with such hostility by staff members that it provoked what will probably be remembered as the most stirring display of the entire affair: the revolt of Roy Megarry. Publisher of the Globe for scarcely a year, and a man believed more interested in mechanical systems and accounting efficiency than in the romance of journalism, 42-year-old Megarry showed “the true mad Irishman in him” at the height of Friday’s tension. He confronted the rumor of the FP sale by announcing to all employees in the newsroom that he was willing to lead a separate movement by employees to buy the Globe away from the chain to maintain its precious independence. “It was a glorious gesture,” said one former Globe staffer, “in the greatest Globe and Mail tradition.”

Megarry’s bravado, however, has little, if any, chance of success. It could even cost him dearly if perceived by FP directors as a form of mutiny. Though an old friend of Megarry’s, and the man responsible for hiring him last year, FP President George Currie put an end to the romantic pipe-dreaming: “The

Globe is not for sale. The FP chain may be for sale but the paper isn’t.”

If Currie is correct and FP is up for

grabs, it could lead to a change in policy and editorial direction at eight major Canadian newspapers having a combined daily circulation approaching one million.* Currie confirmed on Friday that Toronto financier Conrad Black, the ambitious new chairman of Argus Corporation Ltd. and Massey-Ferguson Ltd., had requested—and received—vi-

*FP Publications Ltd. is Canada’s third largest newspaper chain after Thomson Newspapers Ltd. and Southam Inc. Privately-owned by five family holdings; FP publishes the Ottawa Journal, Toronto Globe and Mail, Winnipeg Free Press, Calgary Albertan, Lethbridge Herald, Vancouver Sun, Victoria Daily Colonist and Victoria Times.

tal financial information from the FP directors on the grounds that he wants to purchase an undisclosed number of FP shares. “So far no offer has been made, and to that extent the whole affair is pure conjecture at this point,” says Currie. “But I know he approached a number of our leading shareholders indicating he would like to make an offer.” While Black himself has refused to comment on the matter to any journalist, Currie said he asked Black whether he had partners in the venture and Black replied, “Yes, I have two: John Bassett and George Gardiner.” One of the reasons for the strong negative reaction amongst Globe and Mail staffers last week is the enduring reputation of John Bassett among many jouralists as the man who “killed” the Toronto Telegram newspaper, which he owned until its demise in 1971. Gardiner—an old friend of Bassett and board member on Bassett’s communications company Baton Broadcasting Inc.—is, among his other business interests, chairman of Scotts Restaurant Co. Ltd., owners of Commonwealth Holiday Inns of Canada Ltd. Gardiner is also controlling trustee of the Max Bell Estate, one of the five private groups controlling share blocks

in FP—three of them, including Bell, operating as private family trusts. “If Black wanted to buy FP, he’d have to approach Gardiner,” said one observer, “and that may have meant cutting in Bassett as well.” Another figure powerful in determining the fate of FP, whose role in the current affair so far remains wrapped in obscurity, is Brigadier Richard S. Malone, 70, former FP chairman, former Globe publisher, who owns or influences the largest single number of FP shares—7.5 per cent in his own name and 45 per cent as trustee of two estates. At this point Malone isn’t talking— though it’s obvious his decision to sell

remains a crucial part of the deal’s success.

Black himself is no stranger to the newspaper business. His own career began as proprietor of the Sherbrooke Record, later parlayed into Sterling Newspapers Ltd., itself a newspaper chain, somewhat smaller than FP, based in Vancouver, with Black still honorary chairman. Last week his colleague at Sterling, President David Radler, allowed somewhat coyly that “our company has always been interested in buying FP if the shares are available”— though he denied any knowledge of the current rumored take-over bid. Why Black would choose this particular time to grab at FP seems to “make sense” to most insiders. Currie himself admits the company has been through a “terrible year.” Losses incurred by two crippling newspaper strikes in Montreal and Vancouver forced the company this 5 year to fold The Montreal Star and, for “ the first time ever, to suspend the dividend. That in itself would make some of its owners restless—but, in addition, two significant shareholders, Malone and Montreal financier Howard Webster, are getting old and may “want out,” while others, children and descendants within the family trusts, may also want out to use the cash in other ways. “This may be,” says Currie, “the perfect time to make an offer.” As for Black himself, he’s believed to be flush with good news of the anticipated turnaround at Massey Ferguson—and in perfect form, say some, for a new, daring move to expand his engorged business empire.

One of the ironies of the affair, as names and rumors buzzed around the newsroom of FP newspapers last Friday, was that the Globe was on the eve of a “byline strike”—the removal of reporters’ names from stories as an indication of union solidarity in the current contract bargaining between journalists and the company. By the time the names are restored, they may be joined by the names of the new owners.