These Guys Mean Business
No one used to think the scrappy little Post belonged in the same ring as the heavyweight Globe. Now they're in a knockdown dragout that's too close to call
For a blitzkrieg in the making, it was announced in innocent-enough language. On August 9, 1995, a modest advertisement in the Report on Business section ofThe Globe and Mail stated that editor Margaret Wente was searching for “several outstanding journalists to help expand ROB’s business coverage.” For years, newspapers had been laying off staff. Now Wente was saying that she had 13 new positions open, and that as of October 3, 1995, ROBplanned to increase its daily news space by 50 percent (to about 40 pages). Industry insiders immediately saw the move as a show of strength, speculating that Report on Businessintended to crush the only other national business daily, The Financial Post. The editorial director there, Maryanne McNellis, responded to Wente’s ad by saying that changes at ROBdidn’t worry her. They should have. Within a couple of weeks, six of her staff had defected to the ROBexpansion team.
The Postwas shell-shocked by the six casualties, which included four reporters and two copy editors. The initial word around the Post was that no one would jump to the Globe. When six did, they caught everyone by surprise, even their closest friends among the tight-knit Poststaff. “That was incredibly depressing,” says Postreporter Scott Haggett. “It came across as a vote of nonconfidence in the paper from a lot of talented people.”
Speaking a month and a half later, Tim Pritchard, managing editor at thePost, puts on a confident face and dismisses the damage done by the Globehires. “I guess there’s a feeling that they tried to deliver some kind of knockout blow by taking six pretty good people,” he says. “But if that’s what Globemanagement was thinking, well, that would be silly.” There is evidence that that’s exactly what they were thinking. ROBeditor Margaret Wente doesn’t believe that Canada can support two business dailies. “I don’t think that in the end there is the circulation base to justify the advertising base that a second paper needs for revenue,” she says.
Even so, Wente says that she didn’t set out to raid the Post, but merely to find good, experienced business journalists, and “a lot of those folks happen to work over at the Post.” The Post’s McNellis sees it differently. “I see it as a raid,” she says. “I mean, they recognized they had a problem and they’re trying to fix it, and so they went and hired from the best-what can I say?” she adds with a laugh. While neither editor would characterize the whole episode as a clear competitive victory or defeat, one thing is clear: it’s not common for six journalists to desert all at once to the direct competition. One or two, maybe. But six? The scrap between Canada’s two leading business dailies for audience and advertisers has clearly reached a state of all-out war.
Most interestingly, it appears that the ROBsection of theGlobe, which pioneered and long monopolized serious daily business journalism in Canada, has finally been forced to acknowledge the true threat posed by The Financial Postdaily, launched in 1988 as an upstart challenger. Granted, the recent raid has left the Post staffers licking their wounds and Globestaffers preening their feathers. And some Globe reporters see the arrival of Postdefectors as a confirmation that the ROBis really the place to be. “Just look at it,” says ROBreporter Casey Mahood. “Greg was the Washington bureau chief for The Financial Post, and he came back to Toronto as a general assignment reporter for The Globe and Mail. I mean, what does that tell you?” But Mahood is ignoring one critical question. Why is ROBexpanding?
Ask people from The Financial Postand watch the blood creep back into their cheeks. In their view, the Globeis expanding because it is running scared. And the evidence? In the spring of 1995, the Globe received some survey results on the views of approximately 1,500 of its readers. The responses about the Report on Business section were alarming: readers felt that ROB’s business coverage was as good as, but not better than, that of The Financial Post. Even worse, a large portion (rumours put the number as high as 80 percent) of respondents named the Post as their preferred source of daily business news. By comparison, back in 1989, in the last such Globesurvey, the Posthad not even been mentioned. The dramatic shift over five years was quite a blow to ROBegos, and it started turning the wheels for the ROBexpansion. Clearly the Globehad slept through the rise of its flashy, fast-paced, tabloid-sized competitor. “We let the daily Postbecome the paper that broke news,” says David Olive, editor ofReport on Business Magazine, distributed monthly with The Globe and Mail. “They have created a loyal daily audience. Some business people buy the Postin the morning or have it delivered and they read it over breakfast. The Globethey put in their briefcase and they may or may not read it when they get home.”
Maryanne McNellis leads me into her large, bright, glass-walled office. She wears a cherry-red suit that is as loud and brassy as the tabloid-style newspaper she has been editing since 1994. For four years previous to that, she was the editor of The Financial Post Magazine, but she likes to emphasize her earlier background in “hard news”: at Business Week Magazine, where she worked between 1972 and 1983 as a correspondent in New York and Los Angeles, as well as bureau chief of the Canadian and Pacific Basin bureaus, and as founding editor of Investor’s Business Daily. At the Post, McNellis is in charge of the newsroom while editor Diane Francis oversees the paper’s columnists. McNellis’ strengths are reportedly more in product development than editing. She leaves the day-to-day newsroom operations to Pritchard and concentrates on FP’s overall coverage and layout strategies. Almost a year after her arrival, the paper was revamped to emphasize business news as it relates to investing.
McNellis speaks emphatically and confidently about the Post’s mandate. “We only really have one focus,” she says. “It’s on business and finance, and people making money. Our readers read us because they care about business issues.” Implicit in this is a criticism of her rival. She believes that the ROB, as a section of the Globe, has to please a general audience of readers of “Canada’s National Newspaper,” whereas the Postcan focus strictly on business readers. She emphasizes that her tabloid format serves that mission well. “Most of our readers are business people who are rushing off to work,” she says, and they don’t have a lot of time, and philosophically that’s where we’re coming from.” In fact, the word “feature” is not even in the vocabulary of The Financial Post managers. “We call them the big reads,” says McNellis, “because they’re not really features. Features to me is something warm and fuzzy, and that’s not what we’re after.”
Sitting in the Globe’s dimly lit offices, Margaret Wente (known to her friends as Peggy) stares at me through conservative, steel-rimmed glasses. She is dressed in a grey suit and black shirt, and her manner is friendly but formally so. Her subdued appearance, combined with the gloomy atmosphere of the Globeoffices, bring to mind the Globe’s nickname, “Old Grey.”
Wente came to her job in 1991 without any daily newspaper experience. She spent the 1980s mainly as a widely respected magazine editor, of both Canadian Business and Report on Business Magazine, and also worked for two years as senior editor of Venture, a CBC television program that deals with business themes. Critics of her newspaper work at ROB mainly attack her for favouring analytical feature journalism over hard news-a natural outgrowth of her magazine experience.
When Wente discusses the recent expansion of her section, she is most enthusiastic about the addition of softer kinds of journalism. “We added a new page called ‘Managing,'” she says, “which deals with matters close to my heart, but it also deals with many issues that you can’t get at very well through event-driven coverage.” This new page covers management issues by way of features, profiles and columns. Picking up on her enthusiasm, I ask whether the expanded ROB generally emphasizes analysis. The severe, emphatic tone of her response makes me feel she is not just answering me, but also her critics. “It’s part of it,” she says, “but ROB is still very hard-news oriented, and that hasn’t changed. And it won’t change because the very first information need of our readers is to find out what happened yesterday and why it mattered.” It sounds like an official mandate, all right, but her words seem forced, as though memorized.
In elaborating on the ROBapproach to business journalism, Wente repeatedly refers to abstract virtues such as value, content and quality. For instance: “Everything that we sell is content, and the value of the content that we offer readers is really the only thing that we offer readers.” Overall, I am left with only a vague impression of what the ROB is trying to accomplish editorially.
Ultimately, the battle between The Financial Post and Report on Business is being fought editorially. The Post has entrenched itself as the authority on investment news that provides concise stories in a tightly organized format. ROB is perceived as a broader, analytical newspaper that emphasizes the quality of its writing as opposed to the friendliness of its format. While there are obviously readers loyal to both styles, recent trends indicate that the Post is winning the war for readers who don’t have time to go in-depth with ROB.
Consider the views of Paul Goldstein, a chartered financial consultant who reads both Report on Business and The Financial Post. He used to read ROB throughout the work week and the Post on Saturdays. He felt the Globe was the stronger paper until a couple of years ago. “I kept hearing of things that were in The Financial Post that I needed to know. I was having to run to the library to get stuff the Globe should have had.” The Globe’s lacklustre performance eventually persuaded Goldstein to subscribe to The Financial Post daily.
Goldstein’s kind of complaint is common among ROB detractors. Over the past couple of years, they argue, the analytical style has hampered the effective communication of comprehensive business news. As the reader survey showed, many of them are turning to the Postas the authoritative source for business news. “The Post was whipping us on scoops,” says David Olive. “The ROBshould be a definitive, comprehensive journal of record of business activity. That is the franchise that was created in 1962, but we moved away from that. That’s the kind of minutiae that we stopped,” says Olive of the pre-expansion ROB. A number of factors contributed to the migration away from news coverage. One was the recession’s effect on ROB news space, which decreased to almost a third of its 1987 size. The other was editor-in-chief William Thorsell’s hiring of Wente, whose new ideas tended toward analysis and paralleled his own. Wente could not both introduce her initiatives and maintain extensive coverage of the news. Although reporters were still reporting on the news, analysis was awarded the limited ROB space.
The recent ROBexpansion is an attempt to bridge the gap with readers whose first need is business news, while at the same time maintaining the good writing featured in other, less newsy forms of stories. Ads for the expansion use the catchphrase “more,” and so does Wente when she outlines the expansion. “We added more Canadian news; we added more international news; we added a page of Wall Street Journalnews as part of our international coverage; we added more investing news.”
Such additions may not solve every problem. Goldstein says he finds the new Globelayout confusing. He does not like the divisions between international and national business news, as he feels the business community transcends national borders. He finds that there is too much paper to wade through and is disturbed rather than satisfied by the expansion. “You don’t know what to read. You don’t know what you’re missing,” he says, “It’s very unsettling to read the paper with all these sections. The Financial Postis very, very clear.’ The story of how ROB and The Financial Post got tangled in their current fight for business readers really begins back in February of 1962, when the Globe launched Canada’s first full-fledged business section. Initially, ROB ran only on Tuesdays and Fridays, but by 1967 it was appearing every day. Through the 1970s, ROB editor Ian Carman headed up the expansion of the paper’s business coverage; the writing was dry and noncritical, but ROB was respected as a news-driven journal of record. In 1983, Tim Pritchard, who had worked under Carman since 1974, took over as editor. He doubled the number of ROB reporters from about 15 to about 30, started including more features and worked to liven up and improve the quality of writing in the section. Even so, ROB largely avoided the kind of analytical journalism that characterized the rest of The Globe and Mail. In the 1990s, under editor Peter Cook, followed by Wente, ROB began to include more background, features and analysis-fulfilling Thorsell’s vision of the paper as a daily magazine.
Meanwhile, over at The Financial Post, a new era began in October 1987. After an 80-year history as a weekly, the paper was sold for $46 million by owner Maclean Hunter, which owns 60 percent of Toronto Sun Publishing, to media mogul Conrad Black, CEO of Hollinger; Douglas Creighton, then Toronto Sun president; and The Financial Times of London CEO Frank Barlow. They formed The Financial Post Company, owned by The Toronto Sun (60 percent), Hollinger (15 percent) and The Financial Times of London (25 percent). The plan to go daily was risky and expensive. After all, in 1987, Report on Business was at the peak of its success, and there were no guarantees that readers and advertisers would accept another business daily.
To define its own niche, the new edition of The Financial Post was completely redesigned as a tabloid, which was a radical approach in business journalism. And the editorial focus was strictly on business news, leaving the weekend edition to cover the broad political social and economic issues that had given the original weekend Post its reputation as a “thinking man’s paper.” By an unfortunate fluke of timing, the Post announced the plan to go daily on October 2, 1987-a mere three weeks before the worst stock market crash since Black Monday in 1929. After the ’87 crash, advertising dried up, placing the new Post in an extremely precarious position. However, the Post launched as planned on February 2, 1988. Competitors figured that the daily, was doomed and adopted the view of the Post as the underdog. “But the underdog is not an underdog,” says David Olive. “The Globe and Mail has revenues of about $200 million, and our rival, The Financial Post, is part of a company worth a couple of billion dollars.”
Not only does it have the financial backing, but the little tabloid, which just celebrated its eighth anniversary, has proven itself to be a feisty competitor. It survived the recession and now threatens The Globe and Mail in the battle for advertising dollars. In this area, the two papers are fighting over a similar set of clients. Many advertisers, including Bell Mobility, Lexus, Fidelity Investments and American Express, find that both papers deliver the audience demographics they desire. On any given day, 60 percent of the readers of both papers are what industry trade jargon calls MOPEs-managers, owners, professionals and executives. They’re the readers most attractive to advertisers because they have the high disposable incomes and the decision-making power over the purchase of many office products and services.
So far, Report on Business is winning the war for advertisers. (And a good thing, too, as the Globe officially admits that 50 percent of its total ad revenues are generated by ROB.) The Globe is particularly strong in career ads, averaging 120 pages every month, despite the fact that it charges almost twice the rates of The Financial Post Careers, which averages 35 pages every month. ROB has the advantage because it has a higher primary circulation. The Globe estimates that 70 percent of all Globe buyers, which works out to approximately 220,000 people, read ROB every day. This compares to 75,000 who buy the daily edition of The Financial Post (Tuesday to Friday) and 194,000 who buy the weekend Post.ROBhas also been traditionally seen in the business community as the “first read” in business news. But to charge its premium advertising rates, Report on Businessmust maintain its front-running position with readers. The Post’s apparent gain on the Globe is threatening ROB’s status as the number one business read and jeopardizing ROB’s share of the advertising market. Who will win out in the end? Circulation numbers will decide. The complicating factor here is that it’s not easy to make a direct and fair comparison of the two papers’ circulation performance. For starters, most statements of ROB circulation are estimates based on research into the general Globe audience and involve some guesswork. And even general Globe numbers can’t be compared directly to general Post numbers, as the two papers are audited by different agencies-The Financial Post daily by the Audit Bureau of Circulations, the weekend Postand the Globeby the Print Measurement Bureau.
Given this situation and the high stakes of the competitive game, the publishers of both papers show distinct bias in their interpretation of various figures-and are quick to attack the credibility of the other guy’s numbers. Douglas Knight, publisher and CEO of The Financial Post, does not accept the Globe’s PMB-generated paid circulation of 313,627 copies-even though this is an audited number and even though PMB audits the Post’s weekend paper. “They aren’t part of ABC,” says Doug Knight, “which is really important because they then count stuff as paid circulation that the rest of us aren’t allowed to count.” The “stuff” is what the Globe refers to as its “blue-chip corporate subscriptions”: 51,211 copies sent to airlines, corporations and hotels at a sharply reduced rate. Knight feels that the Globe won’t join ABC because it wants to continue to pad its readership with the corporate distribution.
So Knight feels that PMB is a crutch for the Globe-but his paper is willing to use PMB figures to its own advantage. The Financial Post daily (audited by ABC) has about half the circulation of the weekend paper (audited by PMB). However, an aggressive 1995 Financial Post advertising package announced that “PMB now shows The Financial Post with its highest readership ever-709,000!” The number quoted is the pass-along circulation (which the PMB calculates by assuming that 3.5 people read each copy of the paper sold) of the weekend edition, but the text conveniently fails to specify that the PMB only audits the Post’s weekend paper, thus creating an impression that 709,000 is the Post’s daily circulation. After this advertising went out, the Globe received advertiser complaints about its high rates. ROB retaliated by putting together information for its advertisers that tactfully accuses the Post of lying. Grant Crosbie, general manager of The Globe and Mail, feels that the Post daily won’t join PMB because that would only dilute the numbers it now claims for the PMB-audited weekend edition-and, by sly manipulation, for the daily as well.
The Globe and Mail’s publisher, Roger Parkinson, also uses audited numbers as ammunition for advertisers. He tells me that 1.1 million people read the Globedaily. This audited number, which averages the PMB’s figure for paid circulation of the paper from Monday to Saturday and factors in a pass-along circulation of 3.5 people per copy, is the circulation figure used to attract advertisers. But Parkinson stretches the number even further when he tells me that by the end of the week, the cumulative Globecirculation is 2.1 million readers.
Perhaps the persistent inflation of circulation numbers is symptomatic of both papers’ desperate need to retain advertisers. ROB advertising is so crucial to The Globe and Mail that the paper has decided on the major expansion of that section while committing no new resources to the rest of the paper. Wente and Parkinson say that the ROB expansion aims to cement the paper’s current circulation lead in the business community and build it up some more. “Strengthening our bond with the core business readership is extremely important to us for a of different reasons,” says Wente. She also mentions that the results of the 1995 reader survey showed that readers rated ROB’s business coverage fairly highly. “So their opinion of us hadn’t changed,” says Wente, “but we have more competition in the marketplace; that’s the factor that had changed.”
And this has become a direct competition, playing out right down at the level of day-to-day reporting. “Inside, we think we have to beat them,” says reporter Casey Mahood. “Inside, there’s a mandate to beat them on every single story every single day. When Parkinson announced the expansion, he said he wanted us to blow the Post out of the water. I don’t know whether we believe that’s possible.” Whether it’s possible or not, the aggressive tone is new to the Globe, which has historically dismissed the threat posed by the Post, mainly because of the fact that the Post has not had a profitable year since going daily. Although publisher Doug Knight reports that his paper logged several profitable months in 1995, Wente laughs off the suggestion that the Post has reached a stage of stable profits. “They’ve been saying that for the last five years,” she says.
Until the Post can prove itself long-term profitable, ROB will be able to argue that it is winning the war. Profitability is the key to determining whether or not Canada can support two business dailies. It may also be the key to building a loyal staff at The Financial Post-who won’t jump ship in future raids. “Every day you used to come into work and you’d never know if the padlocks were going to be on the door,” says Post reporter Scott Haggett. Now, he says, confidence is increasing and morale is improving. Staff has recovered from last summer’s raid, and the vacancies at FP were filled quickly by senior journalists. Post managers are confident that their readers won’t be impressed with the expanded ROB.
At Report on Business, it’s too early to tell whether “more news” and “more content” will attract “more readers”. But clearly a lot is at stake. “This is a battle we can’t lose,” says David Olive, “because the whole paper dies if we fail.”