When John Honderich announced he was leaving his beloved Toronto Star after 15 years at the helm, his staff were stunned. They assumed he had been forced out by Rob Prichard and the new corporate culture, and they were probably right. But the old-fashioned newspaperman with ink in his veins and a hearty lust for life may get the last laugh yet.
By David Hayes, Toronto Life, October 2004
ONCE UPON A TIME, the newspaper world was big and rowdy. Many cities had multiple dailies locked in primal competition, each filled with oversized characters who indulged in shameless shenanigans. Then the newspaper world became respectable and tidy, a white-collar profession filled with university graduates and run by corporate managers, only occasionally showing a flash of its disorderly past. Even in Toronto, where the biggest newspaper war in North America has been raging for five years, it’s been a civil war: a scoop here and there, muted criticisms exchanged whenever circulation numbers are published.
But one paper retains some of that old rowdy character. Last April, at a cavernous venue in the Distillery District, the Toronto Star held one of its famously rambunctious parties in honour of its outgoing publisher, John Honderich, the personification of the Star and a high-profile booster of the city. Some 600 guests–not a bad draw on a night when the Leafs were up against the Flyers in the playoffs–grazed at food tables and well-stocked bars. When the “formal” ceremonies began, the crowd, many wearing paper bow ties handed out at the door to commemorate Honderich’s trademark neckwear, pressed toward the stage to listen to speeches and watch a video hosted by Peter Mansbridge (“Will the bow tie business survive the blow?” Mansbridge asked). The video featured a parade of dignitaries–from David Miller to Dalton McGuinty to Paul Martin–expressing their best wishes.
Four glamorous young women escorted Honderich onstage as though he were Hugh Hefner and seated him in a chair at stage left. The room filled with the booming sound of Tina Turner’s “The Best.” Honderich, in navy suit, blue satin vest and blue-and-gold bow tie, sipped from a glass of wine and flashed an ear-to-ear grin as a towering Tina Turner impersonator with sinewy biceps hit the stage wearing stilettos, a gold sequined mini-dress and a wig that looked as if bird and eggs might still be inside it. You’re simply the best, better than all the rest, better than anyone, anyone I’ve ever met …
Honderich is an imposing figure, six foot two, solidly built, with broad, chiselled features. Far from appearing embarrassed, he seemed delighted, even when Tina’s bump and grind came so close that it could pass for a lap dance. A visibly energized Honderich leapt to his feet, boogying groin to loins with Tina in a performance of such abandon that it inspired a red-blooded roar from the crowd. There is about Honderich something of the spirit of that old-time newspaper era. He’s larger than life, a lusty, primal man of large appetites and few inhibitions. Tear us apart, baby, I would rather be dead …
An appropriate sentiment, since many Star staffers were disturbed by the circumstances surrounding Honderich’s departure. That mood was captured by columnist Joey Slinger, who delivered a satiric speech later that night, expressing what everyone around the Star had been whispering for weeks. “There’s been a rumour,” said Slinger. “Is it true that John has been dumped, invited out, selected aside …?” At which point many eyes turned to a tall, blond man in a dark suit standing alone in the crowd. If anyone had done the dumping, it would have been Torstar CEO Rob Prichard, whose eyes never left Slinger. He smiled, laughed and clapped in all the right places, but what on earth was he really thinking?
AS RECENTLY AS LAST YEAR, John Honderich seemed invincible. He had served as editor of the Toronto Star, Canada’s largest newspaper and the flagship property of Torstar Corp., from 1988 to 1994, before becoming publisher and de facto editor. During his watch, the Star won 34 National Newspaper Awards, three Michener Awards for meritorious public service and the only Pulitzer Prize ever granted to a Canadian paper. He was also widely credited with devising the strategy–a high local news quotient–that has made the Star the big winner in the city’s newspaper war.
But Honderich was never merely a senior manager. He’s the son of the legendary Beland Honderich (“Bee” or “the Beast”), a self-made man who became a journalist and rose at the Star to editor-in-chief by 1955–at a time when the paper was embroiled in fierce competition with The Globe and Mail and the Toronto Telegram. He bought a piece of the company a couple of years later and eventually fought his way into the publisher’s chair, where he remained from 1966 to 1988, adding chairman of Torstar to his title in the latter years. (Honderich Sr. ground through so many editors that accepting the job was more death sentence than promotion; his son wisely took over as editor only after Bee retired.)
John Honderich’s roots in the company run deep, his influence even deeper. He is a part owner of Torstar as a member of one of the five sometimes fractious families that form the voting trust that controls the firm. Ousting him would seem an unlikely, if not reckless, undertaking.
Yet on the morning of Saturday, January 24, the Star learned–along with the rest of the country–that that was exactly what had happened, and learned it in a way that was most humiliating to the Star. At 6:15 a.m., foreign editor Bill Schiller was preparing to leave for a Florida vacation when he saw a front page Globe and Mail headline: “Honderich to Bow Out From Star, Sources Say.” The story, written by business columnist Eric Reguly, reported that John Honderich was preparing to step down as publisher of the Toronto Star “after a clash with Robert Prichard, head of the newspaper’s corporate parent,” then added it was “an open secret that [Prichard] and Mr. Honderich do not get along.”
“I was stunned,” says Schiller. “In our hearts we knew that eventually there would be a passing of the Honderich era, but that doesn’t mean we expected it at this time.” Schiller waited until seven to phone the paper’s managing editor, Mary Deanne Shears; she had only just learned the news herself. Shears, who would field shocked calls all day, prepared a story that ran in Monday’s Star, quoting from a memo Honderich provided that confirmed the Globe report. “After almost 10 years as publisher and 28 years on staff, I am announcing I will be leaving the Star. I do so with regret,” he wrote. “However, for some time there has been a corporate desire for change. As a result, I have worked hard to bring about an effective transition, and will continue to do so.”
No one seems to know, or will say, how the story leaked, but the timing was favourable to Honderich. Three days later, he was named a member of the Order of Canada for his role in guiding editorial coverage that drew “public and government attention to such issues as child and spousal abuse, youth unemployment, racism and health care.”
That afternoon, a casual celebration turned into a spontaneous newsroom tribute attracting hundreds of teary-eyed staff from all divisions of the paper. A visibly moved Honderich told them, “You have given me the support, you have given me the dedication, without which I couldn’t have been successful in what I did.”
Honderich was apparently comfortable with the idea of establishing a succession plan, but he’d had a much longer transition period in mind. At 57, he’d lost little of his vigour and had shown no sign that he was considering early retirement. That said, it was no secret that he had an interest in writing books, becoming more involved in public policy, perhaps even running for political office. Or simply taking on a different, more strategic role within Torstar.
But there was nothing orderly about this transition, and since no news is quite as juicy to the media as media news, journalists jumped all over the story, speculating on Machiavellian plots in Torstar’s boardroom, while Star staff filled the paper with gushing appraisals of Honderich’s reign and raged about the fratricide. (Antonia Zerbisias: “We were convinced that Toronto Star publisher John Honderich would go down fighting the dark forces of ultra-conservatism …” Rosie DiManno: “What they’ve done to John, it sickens me.”)
Honderich’s bosses tried to defuse the attention with praise. “John has made a remarkable contribution to advancing the Toronto Star over a long and distinguished career,” Prichard said in a news release. “He has led the newspaper with distinction, passion and great effectiveness … Everyone at Torstar and the Toronto Star is profoundly grateful for his leadership.” He also said, “John and I have been working together on this transition for many months and are committed to ensuring it is smooth and seamless”–a statement that reverberated with so much subtext the tremors could be felt up and down the 26 floors of One Yonge Street. Torstar chairman John Evans added that the Star would continue to be a great metropolitan newspaper “faithful to the Atkinson Principles and the values they represent.”
THE ATKINSON PRINCIPLES? Somehow every Toronto Star story ends up being about this odd bit of the company’s DNA. In 1892, when Toronto was a bustling city of 180,000 with five daily papers, a group of striking newspapermen founded a sixth, a self-styled “paper for the people” called The Evening Star. It floundered and was eventually bought by wealthy supporters of Liberal prime minister Sir Wilfrid Laurier, who hired a journalist named Joseph Atkinson to run it. Atkinson was an acquaintance of Laurier’s and shared his views on creating a just society; he renamed the paper The Toronto Daily Star and transformed its contents. He hired top writers and editors to make stories livelier and to provide thorough, even excessive, coverage of major news events.
A Methodist, Atkinson subscribed to the belief that “society must be made good and its imperfections corrected.” So Holy Joe, as he was known, launched crusades in support of mothers’ allowances, unemployment insurance, old-age pensions, publicly owned transit, a national health plan, minimum wages and the rights of unions. He also kept expenses under control and attracted advertisers, among them department store tycoon Timothy Eaton, who began publishing a full-page ad every day. Atkinson’s genius was to combine popular journalism and smart business practices with a strong social conscience.
As time passed, the original investors sold out, and Atkinson became the sole owner of what had become a very profitable paper. When he died, in 1948, he left most of his personal fortune and control of the paper to the Atkinson Charitable Foundation, stipulating in his will that the paper could be sold only to people willing to embrace his Atkinson Principles, a list of liberal tenets that, roughly summarized, meant keeping the Star a progressive paper committed to social, political and economic reform. When the provincial Tories of the day tried to scuttle the deal by passing legislation preventing charities from owning more than 10 per cent of a business, the foundation’s trustees–made up of Atkinson’s son, Joseph Jr., his daughter, Ruth Atkinson Hindmarsh, and grandson Harry Hindmarsh; the Star‘s advertising manage, William Campbell, and its production engineer, Burnett Thall; and editor-in-chief Beland Honderich–bought the Star themselves.
While family ownership of Canadian media companies is not unusual (the Aspers of Canwest Global, Ted Rogers of Rogers Communications, Pierre Karl Peladeau’s Quebecor, and the Calgary-based Shaw family, to name a few), the hydra-headed, multi-generational, sometimes feuding voting trust certainly is. Today, the trust is represented on Torstar’s board mainly by descendants of the original six. They long ago hired professional management to run the corporation but still control the majority of Class A voting shares. This means when it comes to commercial issues affecting the paper or the firm’s ownership, the Atkinson Principles should trump the bottom line.
Some believe the Star benefits as a company because it’s guided by more than a Darwinian profit motive; others, especially Bay Street analysts, believe that the trust prevents Torstar from making bold corporate moves. One thing seems clear, though; it was over an interpretation of the Atkinson Principles that John Honderich and Rob Prichard crossed swords.
ON THE SURFACE, Honderich and Prichard might seem to have enough in common to have hit it off. Honderich grew up comfortably upper-middle class. Because relations with his father weren’t always smooth, and because he didn’t want to appear to benefit from nepotism, he resisted a career in newspapers. He studied political science and law at the University of Toronto, and considered a career in academe. But journalism was in his blood, so, a freshly minted lawyer at 26, he went to work as a copy boy at the Ottawa Citizen. He proved a hardworking reporter and was recruited by the Star‘s Ottawa bureau. Later, he spent time at the Washington bureau and then held several editorial positions in Toronto before becoming editor.
While no one believes Honderich didn’t benefit from his name, it’s fair to say that he got to the top on merit. (The only time anyone ever heard of his father intervening was in 1988, when the board had to decide between two candidates for editor, one of them John. Beland argued that his son wasn’t ready. The board decided otherwise.) Not long after he was appointed publisher, John Honderich reclaimed Joseph Atkinson’s 19th-century crowed walnut desk from John Evans’ office. It’s often said that although he understands that the Star and all the company’s properties must be profitable to survive, no one believes more powerfully in the Atkinson Principles than Honderich.
Prichard, whose father was a pediatric neurologist and professor of medicine at U of T, also grew up in an environment of privilege. He attended Upper Canada College, where, he says, he was an indifferent student until the end of high school. In 1967, he went to Swarthmore, the small liberal arts college near Philadelphia, at a time when it was a hotbed of student radicalism. Martin Luther King and Robert Kennedy were his heroes, and he developed his progressive politics and sense of public purpose there. Later, he earned an MBA from the University of Chicago, home of the conservative Chicago school of economic theory, where he gained a respect for market economies and the role of business in society. He got his law degree at U of T, ended up heading its law school and, finally, became president of the university in 1990, transforming it into a fundraising powerhouse. (A master schmoozer, Prichard boosted U of T’s private endowment fund from a couple of hundred million dollars to more than a billion.) He has a reputation for respecting institutions with a social mission while still championing a big-business agenda–surely an ideal candidate to be CEO of a $1.5-billion enterprise like Torstar, with its flagship crusading newspaper.
A flagship, yes, but the Toronto Star is also one of the country’s strangest papers. It prides itself on having a national and international influence far greater than that of most metropolitan dailies–its coverage of both has been especially ambitious in recent years–yet as the hometown daily for those who live in the GTA, it’s often self-consciously parochial. (The old joke is that Star editors have already prepared a headline for the final edition: “Armageddon Snarls Metro Traffic.”) With an average of 2.1 million readers a week, the Star tries to please everyone, at least a little, which can make reading it disorienting. On the opinion page, there might be a piece dissecting trade issues alongside some heartwarming fluff about kittens. Editorial writers and columnists might, on a given day, wag their fingers at the endangered state of Canada’s cultural industries, while elsewhere in the paper vast coverage is given to American celebrities visiting Toronto. The Star also produces a smorgasbord of supersized special sections. Most are advertising vehicles (for automobiles, homes, condos, food), and although all are devoted to consumption, last year the Star felt the need to create a stand-alone section called Shopping.
Still, largely in response to the newspaper war, the Star has become more sophisticated in recent years. It employs writers of the calibre of Mitch Potter, Jennifer Wells, David Olive, Geoff Pevere and Oakland Ross, and has published award-winning investigative series–many involving Star reporters Kevin Donovan and Rob Cribb–on racial profiling by Toronto police, poor conditions in nursing homes, low-income housing, weak standards in the herbal remedy industry and a provincial regulatory system that failed to hold doctors accountable for their mistakes. (There was at least one glaring misstep: an over-hyped story about a lack of racial diversity among the Toronto Blue Jays.) Honderich himself was behind a crusade called A New Deal for Cities, which helped put the issue of Canada’s deteriorating and underfunded urban centres on the political map.
But it’s the culture of the sprawling editorial department that is most distinctive. Newsrooms are not generally happy workplaces. The burden of producing important stories accurately and on deadline, the intense competition, and the fiercely independent and insecure nature of journalists all contribute to an air of anxiety. The qualities that make someone a successful writer or editor are often antithetical to those that make an effective and humane manager, yet with few exceptions the only way for an ambitious person to make more money is to move into management.
If that’s true of most papers, few equal the Star in its rigidly hierarchical management structure. It’s a top-down system that took shape during Beland Honderich’s reign and exacerbates the challenge of running a newsroom with 400 employees and a $44-million budget. “The trouble with the Star,” said one loyal veteran, “is that they want people with ideas and initiative, but once they get them into key management positions, everything is dictated to them from above, so anyone with any ingenuity and drive struggles.”
Several seasoned Star journalists described the place as “bizarre” or “surreal.” For one thing, it’s the only paper in the country that has no editor-in-chief, at least in title. When John Honderich assumed the role of publisher in 1994, he dropped the title of editor but continued to fulfill the role. As his successor, Honderich recruited Michael Goldbloom, former publisher of the Montreal Gazette, who promised to appoint an editor-in-chief. The rumour mill churned out several names, among them the Star‘s editorial page editor, Bob Hepburn; Chicago Sun-Times publisher John Cruickshank; and former National Post editor Ken Whyte, a conservative who once told a colleague he found the Atkinson Principles sufficiently vague that even he could live with them. But in late August, Goldbloom announced that Giles Gherson, editor of the Globe’s Report on Business, would take the reins.
As the managing editor, Mary Deanne Shears–universally known as “Mary D”–has the second most senior editorial job, overseeing all departments and everything that goes into the paper. Because the Star puts such value on local news, the managing editor is really a hugely powerful city editor. Which means that whoever holds the city editor’s job doesn’t have much pull. But as a number of staffers explained, through both generations of Honderichs it has never really mattered, because all editors based their decisions on what they thought the Honderichs wanted.
One middle manager, who referred to the power structure as “Alice in Wonderland weird,” put it this way: “When senior editors tell you to do something, you know you’re not really being told what they want but what they think Mary D wants. But she’s not even the one, because they know that Mary D anticipates what Honderich wants. You know those bracelets that say, ‘What would Jesus do?’ Everyone could have been wearing bracelets saying, ‘What would Honderich do’?’ It breeds a culture of second-guessing and mistrust, and a lack of innovation. Ideas that should be bubbling up from the bottom have to pass though many filters, each guarded by managers afraid of backing anything unless they know Honderich will like it. So why even try to innovate? You know your career probably isn’t going forward, but it could slide backward.”
“All of them, reporters and editors, are trying, in their vague, misguided ways, to massage and please everyone else,” another observer said tartly. “It’s the most colossal of all cluster-fucks.”
So while Honderich was widely admired for his news judgment, his infectious energy and, especially, for his unconditional commitment to the Star, he wasn’t universally loved. During the sentimental outpouring last winter, it was as though many long-time staffers had forgotten, or decided to overlook, old wounds, like the ill will they’d felt toward him for his hard-line stance during a nasty strike in 1992. Or frustrations over promotions denied, real or imagined slights and all the other baggage that bosses can’t avoid collecting.
Honderich was also seen as having favoured a clique that formed around the investigative unit and the paper’s libel lawyer, Bert Bruser, who spent two days a week in the editorial department. (Bruser and Honderich were good friends, both with backgrounds in law–from U of T, a year apart.) Petty stuff, really, but in this case, the investigative unit was run by an editor who was resented in the newsroom and repeatedly described to me as one of Honderich’s “blind spots.”
Jonathan Ferguson was an 18-year veteran at the paper, a scrappy reporter who, in 1999, was promoted to the first of several management positions, among them city editor and, later, deputy managing editor responsible for the investigative unit. According to people who worked for, or parallel to, him, he was a high-energy cheerleader who could rally his forces to pursue stories tenaciously. In the heart of the newspaper war, Honderich saw him as a way of shaking up the city desk, even though Ferguson already had a reputation for being disorganized and for having an abrasive personality.
“Ferguson had a charismatic, ‘let’s go, boys’ quality,” said one senior manager, “and the paper won awards under him. That’s the quality that John glommed onto. But Ferguson really spun it, exaggerated his own importance. Journalists tend to be suspicious of self-promoters because they’re used to critiquing self-promoters. Many reporters hated him, and they didn’t understand why John didn’t do something about him.”
“I came close to leaving for the Globe during the Jonathan Ferguson period,” said a long-time reporter and editor who ended up on Ferguson’s bad side. “I wasn’t the only one; a lot of people who are extraordinarily loyal to the Star were badly hurt in all this.”
In 2002, Ferguson was caught forging Mary Deanne Shears’ signature on receipts for expenses he hadn’t incurred (In a subsequent wrongful dismissal claim, he admitted to the forgeries but argued that he had a bipolar disorder and that the Star had granted him a temporary leave to get help. The paper’s explanation was that it “was attempting to provide the plaintiff with the opportunity to manage his departure in a dignified manner.”)
Honderich belatedly realized how destructive Ferguson had been, and the whole affair should have been written off as a relatively insignificant internal matter, but the timing was bad. If the staff questioned how Prichard, an outsider to the Star‘s culture, could muster the clout to engineer a coup against the man known as “Mr. Toronto Star,” the Ferguson incident provided some clue. It left Honderich vulnerable to the argument that he’d had a long run as publisher and perhaps it was time for a change.
THERE MAY HAVE BEEN a few cracks in Honderich’s armour before Prichard came on board. In addition to being publisher and part owner of the paper, Honderich was head of Torstar’s media operations (then comprising five dailies, 20 Web sites and a cable channel) and had a seat on the board as his family’s voting trust representative. In that capacity, he clashed twice with Prichard’s predecessor, David Galloway, first over Galloway’s push for a $4-billion merger with Rogers Communications and again when Galloway proposed boosting share value by spinning off Harlequin Enterprises, the romance fiction publisher that has long been the company’s financial engine.
Honderich won these battles but resigned as head of media operations in 2001 (most saw it as a demotion) and gave up his seat on the board. That was probably perceived as a positive development for Prichard, the incoming CEO, who would not have to contend with the same awkward arrangement as Galloway–one of his line managers also effectively acting as one of his bosses. But other conflicts soon emerged.
Although the principals aren’t publicly discussing Honderich’s departure, the most plausible scenario stems from a personality clash. Globe and Mail columnist Margaret Wente described the dynamic this way: “In the corporate jungle, there’s never room for more than one alpha male in any tree.” Honderich is a crusader, the custodian of the Atkinson Principles, which, in part, express a variation on 19th-century American journalist Finley Peter Dunne’s famous line: “The job of a newspaper is to comfort the afflicted and afflict the comfortable.” As the last member of Torstar’s controlling families in active management, he saw himself as more than merely the Star‘s publisher. And compromise isn’t one of his greatest virtues.
Throughout his career, Prichard has cultivated an ability to comfort the wealthy and powerful, many of them individuals with huge egos and conflicting agendas. Besides being a bridge builder and a consummate political operator, he is also capable of acting decisively and ruthlessly. Tension between the two men was almost inevitable.
There was also disagreement regarding operating policy. Over the past half-dozen years, Torstar has been a profitable “old media” company at a time when its competitors were accumulating enormous debts by trying to interconnect a mix of print, broadcast and Internet properties (the infamous “convergence”). Financial analysts, many of whom believe that debt-ridden media companies like BCE, Canwest Global and Quebecor will eventually figure out how to make convergence work, found Torstar unsexy and were advocating bold moves to improve shareholder value.
The Torstar board went to considerable trouble and expense to find a new CEO who could sort out the company’s future, so there were huge expectations of Prichard, who is, after all, ultimately responsible for Torstar’s financial performance. During the newspaper war, the Star had been given the resources to maintain dominance in its market. It did so while managing about 15 per cent profit margins at a time when both the Globe and the Post were losing money. To put this in perspective, Torstar’s other daily papers–the Hamilton Spectator, Kitchener Waterloo-Record and Guelph Mercury, each of which enjoys monopoly conditions–earn between 18 and 20 per cent; even the cash margins for Harlequin, Torstar’s money-spinner, are less than 20 per cent.
Still, in 2002, Prichard is believed to have told Honderich he expected the Star to produce profit margins of more than 20 per cent in the coming year. Honderich, who interpreted this as an attack on the Star‘s independence and on the Atkinson Principles themselves–which view profits as secondary to Holy Joe’s idea of the public good–threatened to take the matter to the board’s editorial advisory committee. (Made up of six Torstar board members, it’s meant to be a court of last resort in the case of disagreements between an editor or publisher and the corporate suite.) In essence, his argument would be the same one he’d stated publicly in the past: the Atkinson Principles require that the Star be maintained as a great and dominant metropolitan newspaper in the city; 20 per cent margins can be reached, or exceeded, so long as the economy is strong, newsprint prices are reasonable and a newspaper war isn’t draining resources. But it can’t be a condition of performance. Prichard refused to comment on his discussions with Honderich, but others in the know claimed that shortly before he and Honderich were to meet with the editorial advisory committee, which might have turned into a messy confrontation, Prichard backed down.
“These are complicated relationships,” explained a Bay Street observer who watched both men for years. “A CEO often has to force his will on a company, and the board requires him to do that. If you’re the new CEO at Torstar and you think you should cut costs, you might be right. And if the publisher of the Toronto Star thinks that might hurt the quality of the paper, he might be right. What makes this especially complicated is that you have a new CEO trying to work with someone who, although he isn’t a founder, might as well be.”
There was a second issue humming in the background. Honderich had sensed Prichard wanted to exert influence over editorial content. There were questions surrounding the Star‘s endorsement of David Miller, for example (Prichard had vigorously supported John Tory), and its position on the Middle East, which a vocal and influential segment of Toronto’s Jewish community feels is anti-Israel. Among the A-list of Jewish business people who are generous U of T donors, and with whom Prichard has forged close relationships, are Barrick Gold chairman Peter Munk, financiers Brent Belzberg and Joseph Rotman, real estate magnate Joey Tanenbaum and Onex CEO Gerry Schwartz, one of Prichard’s closest friends (they travelled to Israel together this past June). It would be understandable for Prichard’s friends to expect a sympathetic ear.
In most organizations, change happens as much by osmosis as by decree. A new boss is known to favour a certain direction. Employees anticipate what he or she wants and modify their behaviour without a directive being issued. Sometimes a new boss is surprised by the unintended consequences; sometimes it’s simply stealth management at work. I discussed this with many Star editors and reporters. Most said they hadn’t experienced or witnessed interference from Prichard. But there was some perception of an attempted political shift to the right, the “corporate desire for change” that Honderich referred to in his memo. One editor is said to have told Honderich, “You know what’s happening, John; you know the pressure we’re under. You’re out the door, and we all know what Rob wants.”
For his part, Prichard, in his bluff, engaging way, dismissed the idea that his corporate friends expect favours. “Not many people contact me about what’s in the Star, because I’ve made it clear that if they have concerns they should write or call the editor or publisher,” he said. “Has the Star been a subject of criticism from both the Jewish and Muslim communities for its positions on the Middle East? Absolutely. Do both sides talk to me from time to time? Yeah. But I get more comments from my ex-university colleagues wondering why the newspaper would say critical things about higher education issues when Rob Prichard was always the champion of the universities. Well, I am the champion of the universities, but that doesn’t translate into what the newspaper says about them.”
As for the mayoral endorsement, Prichard admitted that John Tory is a long-time friend and that he had indeed supported his candidacy, but only “after checking with John Honderich in advance to ensure my doing so could not possibly compromise the Star‘s editorial position. John,” he added, “gave me the green light.”
By early 2003, despite his board connections, Honderich sensed that his position was weak. Eager to avoid a bloodbath, he expanded a search for a new vice-president of human resources into one for a potential successor who might replace him in four or five years, and he made that known to Prichard and Evans. Looking to recruit someone who shared his values and would be acceptable to Prichard and the board, he attended a conference on the media at McGill University, organized by Michael Goldbloom.
A labour lawyer and former president of the Montreal YMCA, Goldbloom had resigned as publisher of the Montreal Gazette, citing interference from the Winnipeg-based head office of Canwest Global Communications, owner of the Gazette, the National Post and other Canadian dailies. (As one senior editor told me, “Anyone who stands up to the Aspers is a friend of the Star.”) Prichard agreed with Honderich’s choice. Negotiations began in earnest in February, and the board approved hiring Goldbloom as deputy publisher and vice-president of strategy and human resources, although it was clear he was being groomed as Honderich’s heir apparent. He officially started work in July 2003; Honderich began acquainting him with the paper and involving him in planning the 2004 budget.
Two months earlier, according to various insiders, Prichard had unexpectedly visited Honderich’s office, told him it was time to announce a departure date–November 2004, Prichard suggested, much earlier than the four- to five-year transition Honderich had envisioned–and handed him a proposed severance settlement. Whether it was Prichard driving the accelerated timetable or Goldbloom, no one is saying, but Honderich must have felt he couldn’t rally enough support on the board to defend himself, He chose to step down even earlier, at Torstar’s annual meeting on May 5. That also marked the day he resumed his role as his family’s representative on Torstar’s board (despite a proposal by John Evans for a one-year “cooling off” period).
Meanwhile, several members of the voting trust were shocked by the way Honderich’s departure was handled, and by suggestions that the Star might be moving toward short-term cost cutting to boost quarterly profits. They rarely speak to the media, but the views of at least one voting trust member became public last February with the release of a study by researchers at Duke University and the University of Washington. Based on a survey of 401 executives across North America, the study revealed that publicly traded companies often sacrifice long-term economic value because of intense pressure from analysts to meet short-term earnings targets. One of the three authors of the study was Campbell R. Harvey, a Duke professor of finance and a member of Torstar’s voting trust.
Though Harvey wouldn’t discuss the particulars of Honderich’s exit, I asked him how the study might apply to Torstar. “People think there is a trade-off between editorial quality and shareholder value,” he said. “I believe that sometimes, like in a newspaper war or something, you take a hit in the short term to be in a strong position over the long term. And that is not inconsistent with value creation for shareholders.” Clearly, Honderich will now be a powerful voice supporting those kinds of views.
EMOTIONS RAN HIGH at the Star following the Honderich affair. To many, it seemed as though their leader had been killed by a newly hired Brutus. Before long, plans for that elaborate farewell party at the Distillery were under way, although sales of the $25 tickets flagged when staff saw Torstar’s information circular, published in preparation for the firm’s annual meeting. Buried on page 24 was a paragraph outlining an agreement with Honderich, negotiated nine months earlier, that entitled him to his current base salary of $385,501, plus a target bonus and benefits for more than two years, his full pension after that, and a grant of 30,000 additional options to acquire Torstar non-voting shares. (One staffer complained at the time, “I’ve always liked John, but I don’t like shelling out 25 bucks to a guy who’s worth more than I’ll ever make in my lifetime.”)
Prichard and Goldbloom had been sending all the right signals–respect for the Atkinson Principles, commitment to editorial quality–and Goldbloom earned points for appearing in costume at Honderich’s farewell party as a member of a lipsynching Abba tribute, not to mention that he plays regular pickup hockey with Star staff. But the day after Torstar’s annual meeting in May, when Goldbloom was officially named publisher, he shocked his employees by telling a Post reporter that he planned to “sit down with the managing editor and try to get a better sense of [the] operations and see whether there is an opportunity to get more efficient.” He later added that cuts, should they be made, would not be “dramatic.”
Does all this portend major changes at the Star? “I viewed the Star as really the last family-owned newspaper of any size in Canada,” said Dan Smith, books editor and the Star‘s union representative for the editorial department. “Most people who work here have spent the majority of their careers under the existing culture, knowing there was some kind of continuity, a family hand at the tiller. The real transition isn’t just the departure of a benevolent figure with ink in his veins who took care of us. It’s a move into the great unknown of being a board-driven media business, much like every other one in the country.”
Perhaps, although a couple of recent developments could forestall that evolution. In early July, Torstar’s equivalent of Kremlinologists–those Cold War junkies who studied the seating orders at Red Army Parades for clues to power struggles in the Soviet Politburo–spotted a change to the list of Torstar board members on the bottom of the editorial page. Ruth Ann Winter; the Hindmarsh family’s voting trust representative and someone seen as allied to the Prichard-Evans axis, had been replaced by Neil Clark, once the chief financial officer at the Star and the former Honderich family representative. That signalled a tilt in the voting trust’s board members–representing more than 50 per cent of the Class A ownership shares–in Honderich’s favour.
What’s more, the chair of the voting trust, Catherine Atkinson Murray, stepped down in late July. Her replacement? As of late August, all bets were on John Honderich, the competitor so driven that even while relaxing on the August long weekend at Georgian Bay he boasted to friends about his family’s 13 medals in the cottagers’ regatta. The man forced out as Prichard’s subordinate is poised to become the most powerful upholder of Star traditions among Prichard’s bosses on the Torstar board.