CONRAD BLACK RESPONDS

Response of Conrad Black
National Post - August 5, 2000

It's a little like reading your own obituary ... The chairman of Hollinger Inc. answers his critics Conrad Black It has been an astonishing experience to read the avalanche of eulogistic farewells I have received from competing media in Canada in the last few days. Almost all of it has ranged from banal to energetically nasty, to unimaginably pompous. It is a little like reading one's own obituaries while still very much alive, and by that criterion, the opinions of some of the journalists of my native country would be unsettling, if they deserved to be taken seriously.

My associates and I have sold a large number of Canadian newspaper assets at a handsome gain and a full but certainly not excessive price, that reflected their financial progress under our ownership. This is not the sort of activity that would normally lead, as it has done, to an explosion of journalistic joy on the scale of VE Day, accompanied by an avalanche of denigration of a fervour and tawdriness that only a journalistic lynch mob can achieve. Our company has been disparaged as debt-ridden, although its debt will now be eliminated and replaced with sizeable cash resources. My own net worth has substantially increased in the last week but I have been reviled by journeyman journalists who divine that I may have been less wealthy than certain popular vocalists or show business impresarios, as if this, if true, were a shaming failure and as if they were qualified judges.

Competing journalists have imputed to me a variety of motives for a business decision whose commercial logic is obvious to anyone of the slightest business acumen. These range from an incurable illness of my wife's, through a lack of avocational zeal on the part of my children, to a rich variety of my own shortcomings, from the onset of slothfulness to a desire to strut about foreign watering places in ridiculous costumes as a hedonistic court jester to international café society. (My wife's health is satisfactory and stable; my children are blameless and my own ambitions are somewhat more exalted, though not because I have an inordinate admiration for Napoleon or am a Rupert Murdoch "wannabe," two other worm-eaten chestnuts that were shopped around yet again last week.)

We must be near the top of the economic cycle, though I foresee no imminent serious downturn. There was, to use a word that has assumed some currency in recent days, a lack of "balance" when our company had more than half its assets in Canada, given that the United States and the United Kingdom, where we are also active, are larger, lower tax markets, without Canada's parochial foreign ownership restrictions, which reduce both asset values and liquidity. The concentration of our ownership in Canada, again contrary to cherished local mythology, was completely accidental, as Southam suddenly came within our reach four years ago after we had accumulated many newspapers in Canada over more than 25 years in the business.

There was a significant amount of debt against these assets, though certainly not so much as to be unmanageable or worrisome. There was a contramathematical disparity between the value of well-managed newspapers sold as entities and the value attributed to them on the stock markets. For some years we have been exploiting this differential by selling newspaper assets and cancelling our own shares in large quantities at discounted prices to the benefit of the continuing shareholders. (Our share price has risen 70% since we announced our present dispositions policy in April.) Finally, though my associates and I are strong believers in newspapers and have demonstrated this not only as investors but in our dedication to improved product quality, it would be impetuous to avoid sensible alliances with other media.

In all of these circumstances, the best possible course was a sale to or merger with a compatibly managed and motivated television company, exempting the National Post. That newspaper has enjoyed an amazing success, surpassing the Globe and Mail's circulation, and driving that venerable and complacent newspaper into financial loss (and hysterical competitive excess, as it predictably showed last week) in only 20 months. Ideally, we would (and we have done so), retain management of the other newspapers until at least 2002 and indefinitely thereafter; and we would (and we have done so) receive a substantial shareholding in the acquirer company, with complete flexibility to keep, reduce, or raise our shareholding with the right to elect directors in numbers proportionate to that shareholding.

My associates' and my old friend, Izzy Asper, offered a fair price and we worked out the other terms described above. He is an outstanding entrepreneur and a St. Laurent-Howe Liberal, as I am, despite the kidnap of that Party by unworthy successors. Not that politics is an important criterion in these discussions, but when he was leader of the Manitoba Liberal Party, Izzy Asper advocated a flat tax and workfare. The National Post has no more appreciative reader than he. And he could not have been more supportive as we victoriously endured an eight-month journalists' strike in Calgary, ending last month, prior to which the strikers had been well paid, well treated and had no articulable complaint, as eventually became clear to their claque of supporters, largely orchestrated from the unionized newsroom of the supposedly conservative Globe and Mail.

Mr. Asper insisted on having participation in a newspaper in the country's largest city but accepted my refusal to part with control over the newspaper that was, as he graciously recognized, my project, with which I had persevered against great skepticism and at considerable, though not excessive, expense. Thus did we arrive at the equal division, but with our company as managing partner, in the National Post. (His company's purchase of its half-interest at the admittedly bargain price of $100-million makes up all of our operating start-up costs.) The editorial position of the National Post will only change if the editors wish it to change. The editorial positions of the other newspapers involved in this transaction will only change for the same reasons, unless relations between the Aspers and ourselves change drastically after 2002.

The average Canadian media consumer might be somewhat curious about why this transaction has received so much more attention than comparably sized sales in other industries. The answer, apart from the customary narcissistic self-fascination of many journalists, is the dissent of my associates and myself, including particularly the National Post, from the basic tenets of the unitary multi-party Canadian federal view that Canada can succeed as a country by being more highly taxed, more comprehensively regulated, and more politically correct than the United States. This is not the place for a review of the vast range of issues and arguments this question raises, but our views are not extreme, harsh, unpatriotically motivated, or even, by international standards, especially conservative. However, we have been relentlessly taxed with all those perceived failings by the upholders of the status quo that has prevailed in Canada for nearly 40 years. We believe that if we continue to try to distinguish Canada from the United States through more expensive social programs and more authoritarian government, the gap between the standard and quality of life in the two countries will continue to grow to Canada's disfavour, as it so clearly has over the last 30 years. We want Canada to do better than the United States, not to be subsumed into it, which we believe to be the almost certain consequence of persisting with present policies. In a more mature political and media society than Canada now is, this debate could be conducted more civilly than it has been.

Our political opponents have assumed that we would behave as they have, that we were using our ownership of newspapers representing more than 40% of the country's daily newspaper circulation as they have used their virtual monopoly of the working press in the Toronto Star, Globe and Mail, CBC and Macleans these many years: to impose a self-serving orthodoxy and strangle and ridicule all opposition. We did nothing of the kind and never sought more than to have a debate, rather than stifle one.

This explains the disgraceful performance of much of Canada's media last week. The terror that they might be challenged in their suppression of serious public debate about the direction of the country seemed to them miraculously to lift. Their jubilation is premature. Our company has reduced its financial commitment to Canada but we have not changed our views, given up the fight, or handed over our newsrooms to political adversaries. "Balance," as Izzy Asper has affirmed, is his objective as it continues to be ours. The National Post will now have behind it not only an enriched Hollinger, but one of the country's most powerful telecasters.

Personally, this will be a long struggle in Canada and I don't have another 30 years to spend on it, as I have spent much of the last 30 years. My associates and I judged it imprudent to remain as fully committed financially to Canada, especially in this intense political environment, as we have been. I am an even more fervent democrat than an advocate of any particular policy, and if Canadians want the policies and leaders they now have, they have an unassailable right to them. Equally, I have the right, personally and financially, to avoid the deluge I am confident these policies and people are steadily bringing down upon the country.

I do not choose to reply to those who in the last week have likened me to a jackal, claimed that I have left no legacy in Canada and that I stripped little newspapers to feed large ones, declared that I have never added value to any company I was at the head of, or am guilty of the vast catalogue of Kafkaesque shortcomings that have been alleged against me by my self-declared enemies in the Canadian media. The authors of these lies and smears illustrate perfectly (especially the several disappointed seekers of employment with us among them) all the weaknesses of the country and of the journalistic craft that I have often addressed before. To my friends in Canada, who are more numerous than a consultation of the local media would indicate, your support is more gratefully appreciated than ever. To my enemies, some of whom have claimed they will miss me, your nostalgia is premature and completely unrequited.