The press lord is poised to launch his new daily

Anthony Wilson-Smith March 30 1998


The press lord is poised to launch his new daily

Anthony Wilson-Smith March 30 1998



The press lord is poised to launch his new daily


Conrad Black was feeling satisfied, yet a bit frustrated. Since his arrival last week in Toronto from his usual base in London, he had been pleased by the overwhelming media interest in his tentative plans to launch a new national daily newspaper. But he also grumbled to associates that he did not want to be “bullied” into announcing a decision before he was ready. Now, on a Thursday night, Black, whose Hollinger International Inc. is the controlling shareholder in the Southam Inc. newspaper chain, was being driven from his downtown Toronto office to an 8:30 dinner. And with characteristic precision, but somewhat uncharacteristic patience, Black was again discussing the issue. The decision, he said, “will be announced by the end of March—but I take the liberty of including the week extending into April in that calculation.”

That is the formal gospel according to Black.

Then, there is the word going around newsrooms all across the country: all systems are go for Black to undertake one of the most audacious gambles of his career. Even for a man whose Hollinger empire (which owns 58 per cent of Southam) makes him the third-largest newspaper owner in the world, the stakes are enormous. The launch of a new newspaper will cost—even if things go exactly according to plan—$100 million over the next five to eight years. Plans are ready to retool and expand the capacity of the printing presses of The Hamilton Spectator—which would print copies for the key Toronto market, where Southam now has no presence. Work must be complete by the planned startup target of October, when the presses will have to accommodate up to 130,000 daily copies of a 48-page, color-filled broadsheet—in addition to publishing the Spectator. Across Canada, other Southam printing presses are being prepared to take on extra capacity.

Southam editors from Vancouver to Montreal are standing by to resume regular visits to Toronto—a shuttle that many

have made for more than a year as members of a core group of veteran journalists who created a prototype for the daily. And Black’s competitors—including The Toronto Star, The Globe and Mail and The Financial Post—are reviewing their own battle plans as they prepare for a major newspaper war. “Mr. Black is smart, and he is tough,” says Paul Godfrey, CEO of Sun Media Corp., which publishes the Post. “But we have a very strong hold on our own distinctive turf.”

Black’s new newspaper will be called Canada Today. Or perhaps it will be The Canadian, The Reporter, The Canada Telegraph or, to paraphrase the name of one of Black’s competitors elsewhere, f The Times of Canada. Within Southam, all those names have been rumored. But no one knows—other than Black and about half a dozen key Southam Inc. and Hollinger officials. The same confidentiality surrounds all of the project—except the bare-bones details that Black and others choose to discuss. Allows Black: “It would be a most intelligently presented product.” Southam executives acknowledge the $ 100-million estimate, and add that it would be a full-color broadsheet, with more than 200,000 copies made available from coast to coast.

Everything else is speculation. And as Southam Newspapers president Donald Babick says: ‘We enjoy speculation, but we don’t comment on it. Mr. Black has the information that he needs—now it is up to him to make the final decision.” But within Southam and among Black’s biggest competitors, almost everyone thinks the sure bet is that Black will proceed—and spark the biggest, most high-stakes newspaper war since the days before television. “I presume Mr. Black is going ahead, and we will respond accordingly,” says Roger Parkinson, publisher of The Globe and Mail—a newspaper that is itself the subject of considerable speculation and change (page 18). And, says John Honderich, publisher of The Toronto Star, the country’s largest newspaper with a weekday circulation of 465,000: ‘We have been preparing for months to welcome Mr. Black into the market. We are prepared.”

Not since 1979-1980, when 77íe Montreal Star, The Ottawa Journal and The Winnipeg Tribune all folded, has the world of Canadian print journalism been in such an uproar. And this time, it is for positive reasons. After years of forecasts that newspapers are outdated vehicles driving headlong to extinction, the print medium has rebounded with surprising strength and record profits (page 21).

But inevitably, most talk on the newspaper publishing scene centres on Black. Over the years, he has built a publishing empire that includes the prestigious Daily Telegraph in London, the Jerusalem Post in Israel (whose publisher is native Montrealer Norman Spector), the Chicago SunTimes and scores of smaller newspapers scattered across North America and elsewhere. In Canada, his real impact began in 1992, when he bought about 20 per cent of Southam Inc. from Torstar Corp., which owns the Star. In August, 1996, he bought out Power Corp., which owned a similar amount. Since then, he has added another 18 per cent bought from other minority shareholders. Combined with separate properties held by Hollinger, that gives Black control of 58 Canadian dailies with a combined circulation of 13.6 million, or 41 per cent of all Canadian newspaper readers.

But Black’s glaring hole continues to be the Greater Toronto Area. The closest he comes to the GTA’s 4.5 million people is the Spectator (weekday average circulation 103,000) in Hamilton, more than 50 km away from Toronto’s downtown core. The GTA comprises 36 per cent of Canada’s retail trade market—the equivalent, as Star publisher Honderich observes, “of Chicago, New York City and Los Angeles combined in per capita terms.” It is also the hub of the country’s communications and advertising businesses—and one of the busiest daily newspaper markets in North America, serving as home to The Toronto Star, The Toronto Sun, Dte Globe and Mail and Die Financial Post.

For all of those reasons, a presence in Toronto appears crucial to senior Southam executives. “Our papers aren’t read in the area with the most decision-makers,” says one Southam editor. A more tangible consideration, says a Southam publisher, “is that most national ad agencies are in Toronto. The people involved will recommend papers they are more comfortable with because they see them at their doorstep every day.”

Many of Black’s competitors, and key figures in the advertising sector, have been skeptical about whether there is a place in the market for a new national newspaper. But Southam officials adopt an aggressive stance in response. Says Babick, who is also the publisher of Southam’s The Vancouver Sun and The Province, also in Vancouver: “If we go ahead, we would have the first real national newspaper. Right now, all you have is a niche paper aimed at investors [The Financial Post] and a Toronto newspaper distributed nationally [the Globe]."

On the question of cost, Babick and Gordon Fisher, Southam’s vice-president of editorial operations, say that a high-quality national newspaper could be run on a relative shoestring through amplified use of existing resources. “There is a possibility of running an operation with a very innovative structure,” says Fisher. In fact, Southam officials and editors and outside sources have dropped some tantalizing hints of how the new newspaper might work.

For the first month or two, about 130,000 copies would be distributed free in the Toronto area in order to build interest and attract advertising revenue away from competitors. About 100,000 copies would be handed out in the rest of the country, almost exclusively in large cities and at hotels and airports. The new daily would have access to Southam newspapers’ physical facilities, research, distribution and advertising resources, and subscription lists.

As Gannett Co. Inc.’s national newspaper USA Today did in its early years, the new Southam paper would “borrow” reporters and editors from other newspapers, which would keep down hiring costs. In Toronto, Southam already has about a dozen reporters and editors in a bureau that supplies stories to other members of the chain—in particular, those in Ontario. “Obviously, that bureau could play an important role in a new newspaper,” says Babick.

Like USA Today, the new daily would probably have a front national news section followed by separate sections for sports, business and lifestyle/ entertainment. A core of editors, with access to forthcoming stories in all Southam newspapers, could cull the most interesting articles and rewrite them to make them appropriate for a national audience. But those comparisons, Black says, apply strictly to the staffing and production aspects of the paper. On the editorial front, says Black: “USA market. We would be much more high-quality.”

The key planners working in Hamilton over the past year have included Fisher; Spectator editor Kirk LaPointe; Michael Cooke, the editor of the Vancouver Province', and Brian Kappler, national editor of The Gazette in Montreal. Fisher has been mentioned as a potential publisher, but all of the others are likely to remain with their own newspapers, and work with the new daily on an off-and-on consultative basis. Several names have emerged to be the editorial head of Black’s flagship. One candidate for editor often mentioned by Southam insiders is Ken Whyte, 37, the editor of Saturday Night. He is a political right-winger and favorite of Black’s who also played a key role on the prototype. In addition, he spent time in London during the last year observing the operations of the Daily Telegraph. Another possibility is Brian Stewart, the erudite and highly regarded reporter and anchor at CBC TV”s The National, who is a close friend of Black. Stewart had lunch last week with Black in Hollinger Inc.’s corporate boardroom in Toronto.

The newspaper’s distinctive “voice” would likely come from a handful of nationally known columnists drawn from either in or outside the chain. (Already, author Mordecai Richler, another friend of Black’s, writes a weekly Southam column, as well as a monthly col-

Newspapers are gearing up for major combat

umn for Saturday Night) The new newspaper would likely have first call on stories from the existing Southam News Service, which has a network of overseas bureaus. And it would also probably have first rights to stories offered by London’s Daily Telegraph world news service, which Hollinger also owns. All that, however, could cause problems for existing Southam newspapers, which use both services.

It is safe to presume that the new paper’s editorial voice will include a hard line against Quebec sovereignty, small-c conservative takes on economics and politics, and strong support of Israel’s position that it has a right to defend itself against all forms of aggression and intrusion in the Middle East. Those are positions Black vigorously supports, and are espoused in some of his major newspapers.

Perhaps Black’s most controversial view is his support for “partition”—the principle that if Quebecers vote in favor of sovereignty, parts of the province that still support federalism should be allowed to remain in Canada. Within the chain, there is an understanding, says the editor of one newspaper, that “you do not have to support that belief—but you are expected to say that this is a position worthy of serious debate.”

When Black’s Hollinger took control of Southam in 1996, he faced a variety of fears and criticisms. One was that he would diminish the quality of smaller papers by slashing costs and staff to the bone in order to increase profit margins. That fear seemed borne out when Hollinger bought The Leader-Post in Regina and The StarPhoenix in Saskatoon from the Sifton newspaper group in 1996. Almost at once, 173 workers were laid off. Black himself has since criticized the manner in which the layoffs were handled—although not the total itself.

But otherwise, there is strong evidence of Black’s commitment to improve editorial quality—and of his willingness to allow dissenting voices. “I like to think,” says Black, “that we have demonstrated the patent absurdity of those claims that we were planning to implement some highly charged agenda. Our priority is quality, profitable products.” 77íe Gazette, for example, runs a regular column by Ed Bantey, an ardent sovereigntist. Quebec City’s Le Soleil and Hull-Ottawa’s Le Droit, which Black also owns through Hollinger, reflect a variety of views. And the curmudgeonly Richler, who negotiated his column deal directly with Black, disagrees strongly with him on many topics, including partition. But, he says, that is never a problem. “Awww, Conrad just loves a good argument,” he says.

On the financial front, Black has one particular strength, observes Tim Jones, media writer for the Chicago Tribune, writing in the current edition of the Columbia Journalism Review. “He is a master at gathering up small, financially challenged newspapers and, with prodding and pruning, turning them into little cash machines, with profit margins averaging around 30 per cent, almost twice the industry average.” In the case of some Southam Ontario dailies, company officials suggest the profit margins sometimes approach 40 per cent.

Although there is no doubting Black’s business acumen, some suggest he benefits from other factors. “A lot of the groundwork for Southam’s success was set by previous people,” says Adam Zimmerman, a former Southam board member who resigned after the takeover. Zimmerman points out that in Vancouver, where Southam is making a profit on its two newspapers after years of losses, one reason is a new state-of-the-art printing plant —which was planned for and approved prior to the takeover. Says Zimmerman, the retired chairman of Noranda Forest Inc: “Look, there is no doubt that he sees things faster and better than anyone. But you could also wish he was not so needlessly ruthless.”

That is a reference to Black’s long, sometimes litigious history of full-frontal at-

tacks on critics. One recent example is the enormous umbrage he took at a two-part CBC profile of him in 1996 that many felt was relatively gentle. His response included a furious denunciation of the CBC that was carried in all major Southam newspapers. But while there are few signs that Black has mellowed, his stewardship of Southam has provided some good news for journalists—and, perhaps, some surprises.

In the wake of changes of editors since Black took over at two of the chain’s largest papers—The Gazette in Montreal and The Ottawa Citizen—the results have generally been positive. Gazette publisher Michael Goldbloom, after consulting with Black, appointed Alan Allnutt, an even-tempered, highly competent veteran of the paper who previously served in a variety of key editorial roles, as editor-inchief. Allnutt has preserved the solid quality of news coverage and bumped the editorial pages in a direction less accommodating towards Quebec nationalists than was the case under previous editor Joan Fraser. That appears to better reflect the majority view of the newspaper’s anglophone Montreal readers. “I find the paper more likable and less tiresome on Quebec issues these days,” says Richler.

And recently, Black announced plans to spend $63 million building a new printing plant for the newspaper—a project that had been discussed, but never acted upon, by previous owners. One reason for that expression of confidence, Black says, “is that I feel the danger of


Major newspapers (circulation greater than 25,000) among the 58 Canadian dailies controlled by Conrad Black

The Vancouver Sun The Province (Vancouver) Calgary Herald The Edmonton Journal The StarPhoenix (Saskatoon) The Leader-Post (Regina) The Expositor (Brantford, Ont.) The Hamilton Spectator The Whig-Standard (Kingston, Ont.) The Ottawa Citizen The Record (KitchenerWaterloo, Ont.) The Sault Star (Sault Ste. Marie, Ont.)

The Sudbury Star The Windsor Star The Gazette (Montreal) Le Soleil (Quebec City) The Daily News (Halifax) The Evening Telegram (St. John's, Nfld.) Black’s major international papers Chicago Sun-Times Daily Telegraph (London) Sunday Telegraph (London) Jerusalem Post

separation is a lot less than it was immediately after the last referendum, when the atmosphere seemed unwholesome.” Still, in a typical broadside on the issue, he immediately added: “I would remind everyone that presses are portable. These ones are built outside Quebec, and they could easily be moved from there if need be.” Perhaps the most interesting case under Black’s regime is the dramatic transformation of The Ottawa Citizen. Under previous editor James Travers, who now runs news operations at The Toronto Star, the content and layout were traditional and rather bland in scope. Travers resigned in 1996, shortly after the takeover (and is widely credited for recent improvements at the Star). He was replaced by Neil Reynolds, an editor known for his fierce independence and intriguing, unconventional story sense. Reynolds has targeted a more upmarket audience through longer stories, introduction of a Sunday feature magazine and a sophisticated redesign. Those efforts are said by Southam sources to have cost more than $1 million.

Earlier this month, the Citizen was nominated for an impressive nine National Newspaper Awards. It regularly runs columns by established journalists such as Charles Gordon and Susan Riley, whose views are far to the left of Black’s. And it has become renowned within the industry as a “writers’ paper” that encourages journalists to be innovative. “I find myself turning to the Citizen with increasing excitement, and I look at it now ahead of The Globe and Mail," says Christopher Dornan, the director of journalism at Ottawa’s Carleton University.

To the surprise of some as well, Black has relied heavily on key figures who are holdovers from the previous regime—including Babick and Fisher. Still, there is no question that Black—often referred to within Southam as “the Colonel” because of his love of things military—keeps a close eye over his troops. He is renowned for his extraordinary memory. At a reception for Southam executives two years ago, Black astonished the publisher of one small Ontario newspaper by greeting him by name—even though they had not met before. And when editorships within the chain open up, Black says, “I have overseen final approval in cases ranging from The Gazette to [Kitchener-Waterloo’s] The Record.” Some skeptics suggest that the proposed new venture might do more to satisfy Black’s ego than the interests of shareholders. And Black allows that the idea of publishing a pan-Canadian newspaper “as a notion is extremely emotionally gratifying.” However, he immediately adds, “as always, I base my conclusions not on emotion, but on what is most advisable in business terms.” Says Globe and Mail publisher Parkinson: “I have too much respect for his business sense to think he does not have solid reasons for going ahead.” So far, in building his ever-expanding newspaper empire, Black has shown an uncanny sense of identifying what readers want, and the most cost-efficient ways to deliver it. Now, if he takes the biggest bet of his life, the fortunes of Black and his new newspaper will be tied together in more than just dollars and cents. They will go down in journalistic history for not just delivering the news—but also for making it. □