Business

Front-page challenge

Conrad Black launches a national daily

Anthony Wilson-Smith April 20 1998
Business

Front-page challenge

Conrad Black launches a national daily

Anthony Wilson-Smith April 20 1998

Front-page challenge

Business

Conrad Black launches a national daily

ANTHONY WILSON-SMITH

At the end of one of the most important days of his professional life, Don Babick, the president and chief operating officer of Southam Inc., did exactly what he has done on many days previously. He left his office in the downtown building that houses The Vancouver Sun and The Province newspapers, and drove home to dinner with his wife, Jacqueline. They and a friend shared a bottle of wine over dinner before calling it a night. By 6:30 the next morning, the 55-year-old Babick was, as usual, back behind his desk. Only then did he have time to reflect on what had just happened and what lies ahead. “I decided,” he told Maclean’s, “that I'm not sure whether I’m excited as hell, scared as hell—or a fair bit of both.”

It is not every day that someone presides over the launch of a new national newspaper. Never mind that the new Southam product has no name, no editor, no publisher, no staff other than Babick—its president and CEO—no design, and no official start-up date. Despite the paucity of detail, the blunt-spoken Babick, who also is publisher of the Sun and Province newspapers, insists that his company is “completely committed to this paper.” He added: “Our competitors will just have to wait until we find it convenient to give out our full strategic plans.” The lack of hard information left some of those rivals unimpressed. In the wake of the launch, Roger Parkinson, the publisher of the new paper’s principal competitor, The Globe and Mail, remarked acidly: “If the way they made the announcement reflects the way they plan to run their new newspaper, I, if I were a Southam shareholder, would have a great many questions.” Lower-level officials at The Globe and Mail and The Financial Post speculated that Conrad Black—whose Hollinger Inc. owns 58 per cent of Southam—may be using the launch as a ploy to pressure one of those newspapers to sell out to him. The most likely target would be the Post, which Black has coveted in the past. Sources at the Post,

which is owned by Sun Media Corp., say their company has previously indicated a willingness to swap the Post to Southam for the Vancouver Province, but that Southam said no.

Most analysts, however, accept Babick’s assertion that Southam is going ahead with its plans. They cite compelling signs of behindthe-scenes activity in that direction, as well as Babick’s personal reputation as a straight shooter. “If that’s what Don is saying, I accept it at face value,” says Parkinson.

Assuming it does go ahead, potential readers will receive only a trickle of information about the newspaper until it hits the streets of nine major cities in October. Among the facts: the newspaper will be a broadsheet published five days a week, with a special edition that includes local news in Toronto—the one major market where

Southam is not now represented. For the first month, copies will be distributed free within selected neighborhoods in the Toronto area and to selected Southam subscribers in other cities. The paper will be printed on Southam’s presses in major cities, with the Toronto edition rolling off the presses of The Hamilton Spectator.

HAPPY DAYS

Total Canadian daily newspaper ad revenues

(in billions)

But other than that, the announcement that Southam will go ahead with its long-rumored new daily only confirmed what most observers already considered a certainty, and left a score of key questions unanswered. They include such issues as the overall editorial tone and content, cost and appearance of the new paper. Advertising industry executives—who play a key role in the future of the project through their recommendations to clients on whether to advertise in the paper— are still arguing over whether its impact will be positive or negative on the overall market. One thing is clear, said Ann Boden, president of Toronto-based BBDO McKim Media Group, “this is the most exciting thing to happen to newspapers in the past decade.” But at the same time, Southam shareholders may wish to take note of the newspaper’s estimated start-up cost. Previous estimates pegged the losses at about $100 million over the next five to seven years, but Babick and other officials now talk about a “range of $100 million to $130 million” over the same period—a potentially significant increase.

Conspicuous by his absence from the news conference in Vancouver was Black, who spent the week at his home in London. Babick, asked repeatedly whether Southam is trying to keep its controversial owner out of the spotlight, snapped: “It is not possible for anyone to be more tied to a project in the public mind than is already

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the case with this and Conrad. He simply saw no need to be here.” In the high-octane world of media buying agencies, at least, Black’s association with the new paper is an important part of its appeal. Within the industry, representatives regularly speak of “Black’s plans” rather than those of Southam. Said Sunni Boot, the president of Optimedia, a Toronto-based media buying company: “Black has established a track record of really improving the newspapers he chooses to invest in. His legend is carrying the day.”

But there is more to the new product than Black’s reputation and the scant details Southam has made public. In the past few weeks, company officials have toured media agencies with a prototype of the newspaper, on condition that people who see it sign a pledge of secrecy about its contents. Those who have done so are impressed. Boden was dismissive of plans for a national newspaper when Southam first began discussions in 1996. But without giving details, she says that the prototype is prompting agencies to “look at newspapers in a different light. I can’t compare it to any existing newspaper that I know of.” Others who have seen the prototype suggest that it makes extensive use of color, and that the articles are aimed at a highly end, well-read audience.

§ As well, Babick told Maclean ’s that an editor-in-chief has alii ready been chosen, but was not introduced at the launch beS cause “the person in question asked for several weeks’ addiy tional time to tend to some personal business.” That suggests I that Black is reaching outside his properties to fill the job. t Babick added that while he will be president, a yet-to-be% named person will fulfil the traditional publisher’s functions.

And some Southam sources believe that Black’s wife, Barbara Amiel, who is Hollinger’s vice-president of editorial operations, as well as a Maclean’s columnist, will play an important advisory role.

No matter who the editor and publisher are, they face imposing challenges. Despite a booming economy, rising ad revenues and record profits at Southam Inc. and other newspaper companies last year, there are signs of trouble. According to figures compiled by the Television Bureau of Canada, the percentage of overall advertising dollars spent on newspapers has declined in recent years, dropping to 19 per cent in 1995 from 22 per cent in 1990 (the last year for which statistics are available). One reason is a decline in the amount of time the average reader devotes to his or her newspaper daily, from 48 minutes five years ago to 46 minutes last year. Among the principal causes of increased profits are a drop in the cost of newsprint and greater efficiencies brought about by staff reductions and improved technology.

For all that, journalism circles have been awash in reports of secret meetings, deals and recruitment efforts by Southam. None of those can be confirmed. “The fact is,” says Babick, “anyone who says they have signed with us from outside Southam is not telling the truth.” The naming of an editor will come first, probably within two weeks. Then, says Babick, “he or she will unveil senior staff shortly after.” Some people within Southam have already been approached or, Babick says, “have reason to believe that will happen.”

The stack of résumés from journalists seeking one of the more than 100 such jobs on the new paper is growing ever larger in Babick’s office and that of Gordon Fisher, the vice-president of editorial operations. “The level of interest on that score,” Fisher said recently, “has been enormous.” Canadian readers may well be undecided on the need for a new paper—but many journalists are ready to vote with their feet.

With KIMBERLEY NOBLE in Toronto