Saturday, 7 April 2007

The Godfather

"It's not personal, it's business."

That dialogue from The Godfather comes to mind in trying to make sense of Quebecor's dismantling of the profitable Toronto Sun and other Sun Media newspapers.

If it's personal, it is heartless and petty.

If it's business, it is quite puzzling.

Why would it be personal?

It is no secret that Pierre Karl Peladeau's father was eager to buy the Toronto Sun in its infancy and was rebuked when he made an offer in 1972. It was an offer the feisty young Sun could refuse and did so without hesitation.

Two Toronto Sun history books published in 1976 and 1993 refer to Pierre Peladeau Sr. knocking on the tabloid's door repeatedly with purchase or partnership proposals in hand.

Ron Poulton, author of Life In A Word Factory, wrote the 112-page history of the Sun in 1976, a mere five years after 62 Toronto Telegram employees launched the Toronto Sun on Nov. 1, 1971 two days after the Tely folded.

Ron wrote about large, lucrative ads being placed in the Sun by Eaton's and Simpson's and said:

"One entrepreneur was quick to spot these trends. He was Montrealer Pierre Peladeau, who owned 75 per cent of a newspaper publishing firm called Quebecor Inc.

"Peladeau was publishing tabloids like Le Journal de Montreal and Le Journal de Quebec when he tried to buy the Toronto Sun in December 1972. His offer was turned down, but he told a (Toronto) Star reporter named James Dunlop that he thought he would get it 'sooner or later.'''

Ron then writes about a meeting Don Hunt, a Sun co-founder, had with Peladeau in Montreal.

"I met him in Montreal," Don Hunt confirmed. "It might have made sense to sell it to him then. (Doug) Creighton, (Peter) Worthington and I would have continued to run it with the existing staff as a condition of sale. We would have made more money that way, but we decided against it."

A more detailed account of Pierre Sr.'s attempts to buy the Toronto Sun can be found in Jean Sonmor's 1993 book The Little Paper That Grew - Inside the Toronto Sun Publishing Corporation.

In it, she writes about "a serious suitor" who arrived at the Sun in 1972 following a Financial Post report on the phenomenal growth of the young Sun in its first year.

"Quebecor's Pierre Peladeau wanted the Toronto Sun and he was not a man of subtle moves. There were casual discussions with some of the directors and Don Hunt was dispatched to Montreal to listen to his pitch.

"He was a little crazy," Hunt remembers. "He picked me up at the airport in his limousine and we went around to the Journal de Montreal and then had lunch at his club. On the way back to the airport, he was pouring doubles of the best cognac in the world in the back seat of his limo."

But the deal "wasn't attractive."

And here is a most fascinating description of the early Peladeau encounters, which took place almost 30 years before Pierre Jr. would buy Sun Media in 1999.

Jean wrote:
"Peladeau, with his shoulder-length hair, owlish glasses and state-of-the-art cognac, didn't have much money. His idea was to trade shares in Quebecor for the Sun, which he believed he could make more profitable by using his own tabloid concept. That formula had already been turned down once in Toronto. When the Tely was folding, Bob MacDonald and Max Crittenden, a Tely editor, tried to interest Peladeau in starting a tabloid in Toronto.

"The project floundered as the Quebecor chief, sitting in his chair on the raised dais where his desk was perched, ranted on about how a newspaper didn't need an editorial stance. In fact it didn't need editorials. The formula of sports, celebrities, entertainment and the raciest bits of local news was the way to rekindle the public's fading interest in newspapers. MacDonald and Crittenden didn't quite see it that way. Fourteen months later, Don Hunt had virtually the same reaction."

"I'll get the Sun," was Peladeau's ominous comment at the time. "If not now, then later."

Jean wrote: "The Sun principals were too busy to respond (to Peladeau's proposal.) The directors merely rubbed their hands in glee. Why would they sell when they were having so much fun and watching the value of their investment multiply? They didn't need grocery money."

In 1977, Peladeau again approached the Sun as a potential partner in expansion projects, including a new tabloid being considered for Edmonton.

"Retired (Sun) director Jim McCallum remembers a dinner with Peladeau, Creighton and Rudy Bratty at the Columbus Centre in North York," Jean wrote. "They were there to discuss opportunities they might pursue as partners. 'I have two very clear remembrances of that dinner,' says McCallum. 'I thought Peladeau was very shrewd and I knew I wasn't going to trust him.'"

Peladeau was rebuked by the Sun from start to finish, with few kind words said about the man who wanted to own the Little Paper That Grew, or at least a slice of the pie.

Born in Montreal on April 11, 1925, he never lived to see the day when he would own all or part of the Sun. He died on Christmas Eve, 1997.

His son, Pierre Karl, became Quebecor's executive vice-chairman and, in 1999, president and CEO. In January 1999, Quebecor purchased Sun Media and, well, you know the rest of the story.

The Suns in Toronto, Ottawa, Calgary and Edmonton have all experienced heavy cutbacks of benefits and employees through a series of layoffs, firings, buyouts and resignations.

Rumours about the future of Sun Media tabloids include morphing them into free Sun/24 Hours commuter tabloids, perhaps all with the formula Pierre Sr. preached in the 1970s.

Strictly business?

Or quite personal, with all of the published negative comments about Pierre Sr. coming back to bite the Sun on the ass?

If it is a case of fathers and dutiful sons, George W. Bush, meet Pierre Karl Peladeau.

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