With newspapers in US, UK, and at home, Canadian wants more
Conrad Black has decided to major in newspapers. He already owns quite a few in the United States, Canada, and Britain, and he says he plans to buy more. His target: smaller newspapers in North America, especially in the US. When the Canadian financier took over Argus Corporation in 1978, he owned everything from a chain of grocery stores to a pulp and paper firm with a tractormaker thrown in. Now after nine years of shuffling, buying, selling, and re-organizing, Mr. Black is left with Hollinger Inc. as his main holding company. It, in turn, has become big in newspapers in the past year and half.
His newspaper holdings range from the Daily Telegraph in Britain, with a daily circulation of 1.1 million, down to the Alberni Valley Times in British Columbia, with a daily circulation of 7,230.
Just look at how Black's empire has evolved since 1978, when he pulled off a palace coup in taking over Ravelston Corporation, the private holding company which is now the dominant power in the Black group. In 1978, Ravelston owned 87 percent of Argus, which, in turn, owned 16 percent of Massey-Ferguson, the tractormaker; 17 percent of Domtar, a pulp and paper company; 23 percent of Hollinger Mines, a former gold mine with interests in iron properties in Labrador; 23 percent of Dominion Stores, then Canada's largest food retailer; and 48 percent of Standard Broadcasting, English Canada's largest private radio broadcaster.
By 1984, the corporate tree was at its most complex. Branches included all or part of Ravelston, Argus, Dominion Stores, Retailing & Wholesaling Group, Natural Resources Group, Hollinger Argus, Standard Broadcasting, Labmin Resources, Norcen Energy Resources, Labrador Mining, Hanna Mining, and the Iron Ore Company - the last of which Brian Mulroney headed before he became prime minister. Small place, Canada, for a big country.
Things were simpler by 1985. The Black empire consisted of all or part of Ravelston, Argus, Argcen, Hollinger Argus, Labmin Resources, Norcen, Labrador Mining, Hanna Mining, and Iron Ore Company.
Flash to 1987 and the June annual meeting of Hollinger Inc.
``Hollinger is now a very simple company,'' said Black. It has shed its natural resources companies, leaving Hollinger with a simple corporate structure centered on media holdings and C$193 million in cash.
The board of directors has a fresh look with familiar faces, such as Fred Eaton, who runs the privately owned Eaton's Department Store Chain, and P.C. Finlay, a veteran lawyer who helps mastermind the shuffling of shares.
There are relatives: his brother Monty Black and cousin Ron Riley. And there's Andrew Knight, former editor of the Economist and now chief executive of the Daily Telegraph, and Daniel Colson, a tough, young Canadian lawyer who negotiated the Telegraph purchase from the Berry family and Paul Reichmann, the property billionaire, whose family owns Toronto-based Olympia & York.
So now Ravelston still owns Argus, which owns 55 percent of Hollinger. The simple picture now is that Hollinger owns 58 percent of the Daily Telegraph, which publishes the Daily Telegraph and Sunday Telegraph; 100 percent of Sterling Newspapers, the newspaper company founded by Messrs. Black, White, and Radler; 100 percent of American Publishing Company, the owner of 22 small papers in the US; 100 percent of Valley Cable TV, a leftover from Standard Broadcasting; and 100 percent of Domgroup, what's left of Dominion Stores.
``It leaves us with some nice real estate,'' says Black.
Hollinger plans to sell its interest in Valley Cable. ``We made a nice exit from that business,'' says Black. ``The sale of it will be completed in the next couple of weeks. We get C$58 million, plus the tax loss, and we keep 5 percent of the company.''
The future of newspaper expansion lies in Canada and the US. Hollinger is bidding to take over Unimedia Inc., a publisher of French-language dailies in Quebec City, Chicoutimi, Quebec, and Ottawa. Black will not confirm the size of the deal but it is said to be worth C$90 million.
Nationalistic Quebec journalists have objected to the intrusion of a tycoon from Toronto. Black, however, speaks fluent French, was born in Montreal, studied law in French at Quebec City's Laval University, and wrote a biography of Quebec premier Maurice Duplessis.
Black is also discussing starting a second English-language daily in Montreal with Pierre Peladeau, a controlling shareholder of Quebecor. It publishes Le Journal de Montreal, the largest circulation French-language daily outside of France, and a string of other publications, most of them down market.
The company paid C$105 million in 1986 for American Publishing Companies, which puts out 22 small dailies in the US, from the Canton (Ill.) Daily Ledger to the Boonville (Mo.) News Advertiser. Hollinger's strategy, says Black, is to go after small newspapers in the US with circulations of less than 25,000, staying under the targets of such giants as Thomson Newspapers and Gannett.
``We're taking crumbs from the rich man's table,'' says Black, who, of course, is far from poverty himself.