Canadian takes a flier on Fleet Street. Investor sees the Daily Telegraph as revivable with new technology
Move over, Lord Beaverbrook, stand aside, Lord Thomson, and watch out, Rupert Murdoch. Here comes Conrad Black. Mr. Black, a Toronto businessman who has just bought 14 percent of Britain's ailing Daily Telegraph, is the latest of a long list of rich men from the Commonwealth -- and a few Americans -- who have taken a flier on Fleet Street.
Some of them, like Rupert Murdoch, have made a fortune in British papers. But the Thomson family sold The Times and returned to Canada, beaten by the British unions.
Mr. Black has long had close connections to the news business. He has written numerous articles himself, published a detailed work on Quebec politics, and started a newspaper chain while still in his 20s.
In a country where businessmen often seem gray and careful, Conrad Black stands out. He is an intellectual and speaks his mind plainly, both rare qualities in Canadian financiers. But he gained his reputation as a financial wizard, a man who by astute maneuvers made things happen.
Black won't disclose his net worth, but observers say it's near $100 million (Canadian). Although he inherited money, he made most of his fortune himself in the past seven years.
Black's first major coup was to take over Argus Corporation, a major Canadian holding company. When one of its founders died in 1978, Conrad and his brother, Montegu, used an inherited minority holding in the private company to gain control over the old board.
Argus became more of a resource-based company, specializing in oil and gas, rather than a firm with minority positions in many industrial companies. This week Norcen, the energy arm of Argus, is bidding for some of the assets of Gulf Canada, a subsidiary of the American company that is selling its Canadian holdings.
Black changed the philosophy of Argus. The old partners sought control by buying as few shares as possible. For instance, they ran Massey-Ferguson, the Canadian-based tractor and combine manufacturer, with only 16 percent of the shares. The directors, the president, and chairman were all from Argus. Black went for outright control. He is now buying out his partners, including his brother, and plans to run the Argus empire alone.
Argus has major holdings in the United States. It owns more than 20 percent of Hanna Mining of Cleveland -- acquired after a bitter corporate battle several years ago.
But it is the foray into Fleet Street that is perhaps most interesting. It will combine the financial and intellectual talents of this unusual businessman. He has a tough job ahead of him if he increases his holdings from 14 percent. He has a right-of-first-refusal agreement with the Berry family, which owns the Daily Telegraph.
Unions are strong on Fleet Street. Unlike their colleagues in North American, British reporters -- with a few exceptions, such as The Economist -- cannot use computer terminals to write or file stories. Union cronyism perpetuates such old work rules, and that keeps too many people doing jobs that vanished from North American newspapers years ago.
Black may be prepared for a fight. When only in his mid-20s he and some partners bought the Sherbrooke Daily Record, a paper in Quebec's Eastern Townships. He sold the press, paid off loans, and sacked redundant staff. Black paid about C$20,000 for the Record and sold it several years later for C$825,000. And in the meantime the Stirling Newspapers group built a successul chain of small-town newspapers.
Money should not be a problem. Argus is flush with cash, having sold off some of its assets. Dominion Stores, once the largest food chain in Canada, was sold to A&P. Standard Broadcasting, a successful chain of radio stations, was sold to a Canadian buyer. This leaves Black with money to invest, should he want to up the stakes on Fleet Street.