CONRAD BLACK: A TYCOON IN TROUBLE Introduction The headlines could hardly have been when it blocked his appointment to a Focus more dramatic. “Black’s Darkest Day” peerage in Britain. Black, who is notori- This News in said The Globe and Mail. “The Fall of a ous for the number of lawsuits he has Review module is an examination of Media Baron” and “Peer Today, Gone brought against those he feels have the collapse of the Tomorrow” wrote The Economist. defamed him, sued the Prime Minister, newspaper empire “Black Eye for Conrad Black” chimed and lost. of Conrad Black, in Newsweek. These are just a few The following year, Black began one of Canada’s samples of the media reaction to the selling off his Canadian newspapers, most successful collapse of Conrad Black’s control of including a 50 per cent interest in the businessmen. We examine Black’s rise his newspaper empire at Hollinger National Post, mostly to CanWest to power, his International. Global Communications. In 2001 he extravagant life- At the time of his losing control, renounced his Canadian citizenship and style, and the Black was one of the most powerful was appointed Lord Black of circumstances that media lords in Britain. The London Crossharbour. The sale of the rest of his led to his losing control of Hollinger Daily Telegraph, the Jerusalem Post, Canadian media assets soon followed. International, the and the Chicago Sun-Times were his Canadians nevertheless have re- source of most of three leading newspapers, but Hollinger mained fascinated with Conrad Black his wealth. International controlled over 200 others, and his wife, Barbara Amiel. As the mostly in the U.S. At the height of his story of their alleged misdeeds at influence, however, Black controlled Hollinger unfolded, few could resist YV Sections over 650 newspapers, including 58 of being amazed at the catalogue of ex- marked with this the 104 Canadian dailies. Lacking only penses the company claimed to have symbol indicate content suitable for a Toronto outlet and a national voice, in been charged by the Blacks. Duff younger viewers. 1998 Black obtained the Financial McDonald (Vanity Fair, April 2004) Post. He incorporated it into a new has written: “Charming, erudite, eloquent, newspaper, the National Post, which and impeccably well-mannered, Black became the leading publication of can be arrogant, self-righteous, snob- conservatism in Canada. bish, and thin-skinned.” The continuing Black’s attitude toward the Liberal saga of this complex man—corporate Canadian government, never positive to wizard or robber baron—will likely begin with, soured even further in 1999 remain newsworthy for years to come. To Discuss Most of Black’s media empire consisted of newspapers. Are you aware of any other media barons whose fame is based on the newspapers they own? How much of Canada’s interest in Black do you think is based on his newspaper ownership, and how much on his ability to make his life and opinions newswor- thy? Were you aware of Conrad Black before viewing this news item? CBC News in Review • October 2004 • Page 18 CONRAD BLACK: A TYCOON IN TROUBLE YV Video Review To learn more Part I about this Cana- 1. What did Conrad Black have to give up in order to receive his British dian tycoon, record peerage? your answers to the questions as you watch the video. 2. Why was Black expelled from Upper Canada College? 3. Why did Black turn to newspaper publishing as his major interest, accord- ing to Peter Newman? 4. Which newspaper purchase gave Black the means for his entrance into British society? 5. What percentage of Canada’s daily newspapers did Black once control? ___________% 6. According to Peter Newman, why did Black found the National Post? 7. Why did Black sue Prime Minister Jean Chrétien? 8. Why did Black have to sell his Canadian newspapers when he renounced his Canadian citizenship? 9. How much money did Black and his associates receive in management fees from Hollinger International? 10. How much money does the director’s report accuse Black and his associ- ates of looting from the company? CBC News in Review • October 2004 • Page 19 Part II Further Research At the end of the video, Peter Newman makes the following statement: “It’s a To learn more perfectly sad story for Canada because we don’t have that many people who about the candi- have that kind of potential, you know. The elements combined to produce a dates for Greatest Conrad Black are very rare. I think the gene pool throws up one of these—one Canadian consider watching some or Conrad Black—a generation if we’re lucky . and we lost him.” all of the programs Newman seems to be saying that Black was a great man (and specifically a great in the Greatest Canadian series, Canadian) who lost (or never fully gained) the respect and admiration of his which runs from fellow citizens. October 17 to November 29 on The idea of greatness is one that the CBC is asking all Canadians to ponder in CBC Television. 2004 as it begins a series of programs designed to help the country choose “the Information on Greatest Canadian.” many important Canadians may be As you watch the video a second time, jot down in the spaces below those found at qualities and achievements of Conrad Black that you feel demonstrate why he www.cbc.ca/ should be considered a great Canadian. Also list any qualities and actions that greatest. you feel indicate that he should not be considered a great Canadian. When you have completed your lists, compare the results with those of your classmates. Why Conrad Black Should Be Why Conrad Black Should Not Be Considered a “Great Canadian” Considered a “Great Canadian” CBC News in Review • October 2004 • Page 20 CONRAD BLACK: A TYCOON IN TROUBLE Things Fall Apart Conrad Black’s control over the news- Enter Tweedy, Browne Did you know . paper publishing empire called Hollinger Black’s problems began in May 2003 The SEC has been International made him one of the most with a letter from the fund-management rather busy in recent years with powerful newspaper magnates in the firm Tweedy, Browne, a minor share- financial scandals world. By 1996, Hollinger owned 58 of holder in Hollinger International. The involving huge the 104 Canadian daily newspapers and letter was filed with the U.S. Securities corporations such was the third largest newspaper chain in and Exchange Commission (SEC). It as Worldcom, the world by circulation. In the first six claimed that $74-million paid directly Enron, and Tyco? months of 1997, Hollinger had earnings Why do you think to Black and other executives as part of so much financial of $176-million on revenues of $1.5- the sale of newspapers in Canada and wrongdoing seems billion. Black sold his Australian inter- the U.S. belonged to Hollinger, not to so prevalent these ests and most of his Canadian ones by Black and his associates. Tweedy, days? 2001, but Hollinger still controlled the Browne demanded that the Hollinger London Daily Telegraph, the Jerusalem board of directors investigate this claim. Post, the Chicago Sun-Times, and over Hollinger International’s directors Further Research 200 smaller publications. agreed to investigate, and soon an- To follow the very complex affairs of nounced that they would broaden their Hollinger Interna- Controlling an Empire investigation to include other areas. A tional, consider a Black’s control of Hollinger Interna- special committee led by Richard visit to the compa- tional was virtually absolute, through Breeden, a former chair of the SEC, ny’s official Web his ownership of what are called “su- was formed. One area was the huge site at www.hollinger.com. per-voting shares.” Black owned only management fees paid to Ravelston. In 30.3 per cent of Hollinger 2002, $25.6-million was paid to International’s combined equity. How- Ravelston by Hollinger, and $6.5- ever, because each of his shares gave million of this went to Conrad Black. him 10 votes, this meant that he had One of Hollinger International’s control of 72.6 per cent of any vote. expense items that seemed to particu- Thus, in reality, he dominated the larly upset many critics was the pur- affairs of Hollinger International. chase of $8-million worth of Franklin Black’s shares in Hollinger Interna- Roosevelt documents and memorabilia. tional, a company based in the U. S., It was hardly coincidental that Black are held by Hollinger Inc., a publicly had spent the previous year writing a traded corporation based in Toronto. In biography of that U.S. president. turn, Hollinger Inc. is 78.8 per cent Equally disturbing were the enormous owned by Ravelston. Ravelston is a amounts of Hollinger funds that had private company owned by Black, his been spent to support the Blacks’ wife Barbara Amiel, and several extravagant lifestyle (see “An Opulent Hollinger Inc. executives. Ravelston’s Lifestyle,” page 23). earnings—hundreds of millions of dollars over the past seven years— Exit Lord Black consisted largely of management fees By mid-November 2003, Black had paid to a division called Ravelston Man- been forced to resign his position as agement Inc. by Hollinger International. CEO of Hollinger International. The CBC News in Review • October 2004 • Page 21 investigation had concluded that Black The Breeden Report Quote and three of his fellow executives had At the end of August 2004, Hollinger “Black and Radler received at least $32-million in im- International filed a 513-page document made it their business to line proper payments.