Conrad Black

by A Matter of Principle

  I received twice-daily bulletins on circulation and followed our sales in every corner of the United Kingdom. We imported circulation-building techniques we had developed in Australia, of the sale of discounted, prepaid subscriptions. By the end of 1994, it was fairly clear that we were holding our own in the battle to retain our status as market leader. Our research also revealed that Rupert Murdoch, in his fierce quest for our circulation, had followed his natural instincts and brought The Times editorially down market, which again tended to make it a second read for the mid-market tabloid readers. It gave us the opportunity, which we took, to invest in product and take over much of the traditionally Times-reading top income and top education-level readers. The old Colonel Blimp Telegraph would emerge from its ordeal almost the newspaper of record of the British establishment and national institutions, and the greatest and most respected daily newspaper in Europe.

  The pressure of the price war was relentless. Murdoch was wooing our staff with salaries we couldn’t possibly meet, but we lost few people as the Telegraph was a relatively happy ship, without News Corp.’s constant Australian back-biting and chippiness, which Murdoch likes and promotes. Barbara’s job at Murdoch’s Sunday Times gave her independence from charges of spousal favouritism but at the cost of justifying moves to Murdoch by our own editorial people. I had to tell Barbara she could not continue working for Murdoch. She left, but not happily.* Most of our management cracked under the pressure. The managing director, Joe Cooke, had a minor stroke and retired. The finance director, promotions director, and several other senior people retired or otherwise departed. Dan Colson, my old friend from the Laval University law school and the very capable vice chairman of the Telegraph, became the co-chief executive, and he and I took direct control of the management. Our editor, the redoubtable Max Hastings – dashing and irrepressible but with a short concentration span and even shorter temper, at times an almost Monty Python–like awkwardness, and a hodgepodge of dissonant, half-formed opinions – also left abruptly.

  He developed an elaborate catalogue of concerns including dislike of the Docklands as a place of work and concern about money being invested in our Sunday newspaper. All the same, Max told me that with a stylized option and bonus package, he would stay. I worked like a beaver for three days and prepared a plan for him, designing around his current divorce proceedings, in consultation with tax and benefit specialists, and assuring him a tax-designer sourced income of over $400,000, but when Max arrived for our meeting, he said, “I’m leaving. I’ve signed with the Evening Standard.” He subsequently wrote a memoir of his time at the Telegraph that was perfectly amiable but represented me as an overbearing proprietor. There was little truth to this, and it is the usual beetle-browed self-dramatization of the frazzled editor, which journalists always absorb with gape-mouthed credulity. I intervened forcefully once, to reverse his original opposition to the American air raid on Libya in 1986. I defended him from all comers, from the widow of one of his former schoolmasters, offended by Max’s vituperative obituary, to Lauren Bacall, who claimed to have been misquoted, to Margaret Thatcher, over her daughter Carol’s disembarkation from the Daily Telegraph. And although our working hours were quite different, I telephoned him after midnight only once, when I read in our principal op-ed piece that the best cure for clinical depression was a cup of tea. His stubbornness and the philistinism of some of his opinions were exasperating. But he was a great newspaperman and a strong leader. Furthermore, I liked him. At the least, he was non-stop entertainment.

  Dan Colson and I had a stab at hiring Paul Dacre, editor of the Daily Mail, as Max’s replacement. In a cloak-and-dagger meeting one evening, Dacre came to our house in Chester Square and enthusiastically accepted in principle, saying that it had always been his dream to be the “editor of the U.K.’s leading broadsheet newspaper.” A few details remained. The next day, Dacre ensured that our conversation was leaked, and the group’s editor-in-chief, David English, offered Dacre a large raise and his own position, with English himself moving up to chairman of the Daily Mail. Dan and I did not especially mind Dacre using us to better his own lot. But we found his self-righteous public claims that he had dismissed our overture – and asked English for an increase in the editorial departmental budget only after English inexplicably got wind of our discussions – tiresome. Dacre and I had a rather acerbic exchange in the Guardian, of all places. I have not seen him again.

  A couple of nights later, I had dinner with Vere, Lord Rothermere, chairman and principal shareholder of Associated Newspapers, which owned the Mail and Evening Standard, where Max Hastings was now going, and told him I did not highly appreciate his poaching our editor. (It was only after his raid that we approached Dacre.) Vere admonished me with all the authority of the head of the Harmsworths and the heir to Northcliffe, saying that we are just theatre owners and that the journalists and editors are actors. They play in our theatres but have no interest in or loyalty to us. It was an apt metaphor.

  The Sunday editor, Charles Moore, became editor of the Daily Telegraph. Dominic Lawson moved from the clever and stylish 175-year-old Spectator magazine, which Andrew Knight and I had bought in 1988, to the Sunday Telegraph. Both proved to be successful appointments. One of the group’s most brilliant writers, Frank Johnson, became editor of the Spectator. After a few years, Frank reverted to writing and Boris Johnson (no relation) became the Spectator’s editor. Boris, with his shock of unkempt blond hair, Wodehousian pratfalls, and endearing teddy-bear appearance and personality, was already something of a folk figure in Britain. His columns were hilarious, and so was almost any conversation with him. When he was doorstopping in his 1997 parliamentary campaign, a housewife informed him that she was going to vote for him. “But why, madam?” Boris famously replied. We managed to get a solemn promise from him that in exchange for the editorship he would not run for election again. A few weeks later, he threw his hat in the ring in two constituencies and was eventually elected as successor to Michael Heseltine in Henley in 2001. In 2007, he deposed the two-term hard-line Marxist Ken Livingstone, generally known as Red Ken, in the election for mayor of London.

  ONE OF THE MANY INITIATIVES we examined was the possibility of buying the competing daily newspaper the Independent. The main shareholders were my left-of-centre friends Carlo Caracciolo (Fiat owner Gianni Agnelli’s brother-in-law and the ultimate limousine liberal) and Juan Luis Cebrián of El Pais in Madrid. In the end, they chose to sell to the Mirror, then headed by Rupert Murdoch’s former editor of the News of the World and Today, David Montgomery. (Murdoch claimed to have fired Montgomery because he “stared at me.” I was incredulous, but Rupert told me to note carefully how he stared the next time I met Montgomery, a serious and intense Ulsterman. I did and found that Rupert had a point.) In January 1995, Barbara and I attended the World Economic Forum at Davos. The days were crisp, with perfectly blue skies and icy, snow-covered pavements. I appeared on a panel in a plenary session with Rupert Murdoch. In the questions we answered jointly after the panel discussion and during the private lunch that followed, with Barbara, Murdoch, and his wife, Anna, Murdoch said he foresaw an early rise in the London newspaper cover prices, to allow for newsprint price increases. Anna, whom I had first encountered when we were receiving communion at the Brompton Oratory, left us early to stop in at church. I thought it inappropriate to accompany her in prayerful thanks at her husband’s signal of de-escalation in the price war, though I felt the urge to set to work on yet another corporate reorganization. The price war continued, but less intensely. The mortal threat dwindled to a serious nuisance.

  THROUGHOUT THE PRICE WAR, I had been toughing it out with our Southam investment in Canada. Here, I was struggling with a suffocating group of grey and greedy minds. We were getting nowhere, ring-fenced by the old management teams and directors. I came up with a plan to merge Southam and Hollinger by exchanging our newspaper assets for their shares. That would give us effective control of the company. But the notion of me in c
harge of Southam was too much for the independent directors, who began feverish attempts to find a counterbalance.

  The familiar and formidable figure of Paul Desmarais, chairman of Power Corporation and probably Canada’s most distinguished businessman, loomed. Driving out to the airport in London to fly to Toronto for a Southam directors meeting the next day, I responded to a message from Desmarais, and he told me that, by invitation, he was taking up an equal shareholding to Hollinger’s with shares issued by Southam’s treasury. I knew this “invitation” was going to be a difficult battle.

  On the airplane, I considered how to deflect the dangers of this move while Barbara, already fatigued with the price war and having some sense of what lay ahead, toyed with the possibility of ejecting herself from the plane mid-flight. I had great respect for Paul, but this was essentially a project for his son André, an amiable young man. Paul is a multi-billionaire, and neither he nor his son really intended to run Southam and maximize profits and transform its newspapers into agents for change in Canada. Their holdings were diverse and included some newspapers, but they were not newspaper publishers the way we were.

  Power Corporation could sideline us to a marginal position, where we would depend on the talents of the incumbent Southam management to raise the value of our investment. This was an unpromising state of affairs. It is difficult for those not familiar with the company to grasp how incompetently managed Southam was and how dreary and disliked most of its newspapers were. The management had come from other industries. The publishers and unit heads tried to manage their divisions second-guessed by head office. Head office specialized in endlessly summoning unit management to Toronto for lengthy question-and-answer sessions.

  The result was an immense infestation, a teeming anthill, of superfluous people and the dedication of much corporate energy to backbiting and internecine struggles. The newspapers were ruled by soft leftist editors who were themselves captives of soft leftist cadres of journalists. They were under instructions to keep coverage local, and this led to endless antagonisms between the newspapers and the principal figures in the communities where they were supposedly building goodwill.

  It took a night of international calls to independent Southam directors from Japan to Hungary, but we managed, by the narrowest of margins, to defeat the original Power Corporation acquisition of treasury shares at the Southam board. André Desmarais and his father telephoned, and we met in Palm Beach a few days later. They were still eager buyers and the other Southam factions couldn’t be held indefinitely, so our best course was to let them in on terms we could live with. I had won this round but did not want to push it. At least Paul was dealing with me now, and not trying to come in the back door. As I recorded in my earlier book, published in 1993 about my career up to that time, we agreed that we would have equal rights, so that there was at least some incentive for the Desmaraises not to collude altogether with the old families and banish us to the corner to be tormented with sharp sticks and hot irons, as Torstar had been. As long as we and Power Corporation acted in unison, we would have determining influence on the company.

  At the next annual meeting, Paul Desmarais sat right behind me. The company president, Bill Ardell, a pleasant and attractive man who had done well in other businesses but had no background in newspapers, gave a very defensive and gloomy report on the newspaper business. Desmarais leaned forward and whispered to me, in French: “When are we selling our shares?”

  The official Southam line, as in so much of the newspaper industry, was that new technologies were a grave threat to newspapers and that the challenge for the industry was “managing decline,” as if our task were the dismemberment of the British Empire. In this way, no insufficiency of performance could be blamed on management. Their comments would be legitimized ten years later but were no excuse for the results they were producing then. I carried the flag for the business, and from time to time the Wall Street Journal and other publications asked me to take up the fight on behalf of newspapers. At Davos and the Museum of Television and Radio meetings, I was a virtual anachronism, like a member of the Flat Earth Society, and I became the most frequent advocate of the viable future of the newspaper industry.

  My contention was that with the new technology we could deliver our newspaper content in any format – online, via telephones, or on flexible screens unrolled from pockets. People would pay for newspapers they liked, with individual writers who engaged them and news and features carefully edited and imaginatively presented. This could not be done with the Southam formula of bland, soft-left criticism of anyone who was actually trying to accomplish anything in the communities where the newspapers circulated. But lively, well-written, provocative, informative, and balanced newspapers could keep their readers, I ritualistically repeated, at Davos, in the Wall Street Journal, at Southam board meetings. I almost said it to passersby on Fifth Avenue or in Knightsbridge. I claimed, despite my lack of background in any form of technology and a desperate lack of rapport with new gadgetry, that in a few years everything would be broadband. We would use the same screen, with the same picture definition, for television (satellite or terrestrial), the Internet, video games; anything anyone wishes to put up. In these circumstances, there would be no television franchises left. The fragmentation of the market might overwhelm the networks, and the strong newspaper franchises would have an incomparable ability to build market share for those contesting for mastery of the screen.

  To some degree, I believed this. But these were times of sheer drudgery for us, and there was little excitement or pleasure in the constant fight for business survival. Our social life was lively and interesting, but the corporate life on which it largely reposed was in constant turmoil. I became progressively more disgruntled with the failure of our Southam investment to achieve anything, and with the squandered opportunity, and with the lassitude of Power Corporation. We were simultaneously fighting the price war in London and being flimflammed by the politicians in Australia. There was a squeeze throughout our company, and the inert, unremitting investment in Southam was a large part of the problem.

  Paul Desmarais was not at all antagonistic, but neither was he an active supporter. For us to get anywhere, I knew this had to change. I invited him to buy our position. Desmarais was unenthused. Eventually, the lack of any progress at Southam became so irritating that I lobbied Paul on the theory of exchanging our shareholdings for a number of Southam’s non-metropolitan assets. Ultimately, the situation was resolved by its cause: the astonishing vanity and complacency of the Southam directors. The unaffiliated directors, “the independents,” as they styled themselves, had engaged an obnoxious lawyer. The independents instructed their counsel to compose a lengthy and dismissive letter to Paul and me jointly. The letter – from the chairman, Ron Cliff of Vancouver, but clearly inspired by the independents’ egregious lawyer – informed us that we had no standing to waste management’s time devising such schemes as an exchange of a block of stock for a carve-out of assets, and that henceforth we could deal with the management only through the independents. By now I was fairly accustomed to being cuffed around by these people, but given that Power Corporation and Hollinger between us had more than 40 per cent of the stock, this was a fairly nervy stance.

  Paul telephoned me in Prague, where I was attending a New Atlantic Initiative Conference (one of the many forums I attended for a while, and one of the better ones). He was so disgusted by the letter, he said, that he was prepared to sell us his stock at his cost. We quickly agreed, and Paul promised that the Power Corporation votes at the next directors meeting would be cast in favour of a special shareholders meeting to remove what I soon publicly described as “the obdurate rump” of our antagonists. We still had a couple of supporters on the board, and the motion passed. The intended targets of the special meeting abstained, a little like East German Communist leader Erich Honecker voting for his own removal in order to preserve party solidarity.

  The shareholders meeting took place whe
n Barbara and I were in Biarritz in the spring of 1996, as we were trying to find a holiday destination with a level of light that would not inflame her dermatomyositis. (Biarritz and the Pyrenees were not the place, but good Jew Barbara found Lourdes astonishing. The birthplace of Marshal Foch in Tarbes she found quaint, but she was distinctly less riveted by it than I was.) The Southam shareholders threw out the five designated retirees by a margin of well over 80 per cent. We could have won without casting any of the Power and Hollinger votes. Even the long-suffering regular shareholders had had enough.

  We went through the head office like a scythe. The millions of dollars that fell off the payroll were imperceptible to the functioning of the company and freed up time for the publishers to operate their newspapers. The editor in Montreal, a distinguished woman who would not represent the interests of 1.5-million primarily English-speaking Quebec readers by being anti-French (an attitude she and we would not tolerate), but was, I felt, quite inadequate in the leadership she was prepared to give the community, graciously retired.

  The Ottawa Citizen was such a shockingly inadequate newspaper for the capital of a G7 country that I suggested Russell Mills, its publisher, retire. He asked to see me. I told him that the editor would have to be changed, and he said that he had been about to propose the same move, and he accepted my suggestion for a replacement, Neil Reynolds, then an editor for the Irving family in New Brunswick.