Masthead News Archives
January 2006

January 31, 2006
Wholesalers propose B.C. pilot project
TORONTO—The Periodical Marketers of Canada—a group representing wholesalers who control 89% of newsstand sales in Canada—will seek government funding to launch a pilot project designed to ultimately boost “the presence, from coast to coast, of French and English Canadian magazines on the newsstand through more effective use of the mass market wholesale distribution system.” The proposal is contained in a study by PMC executive director Ray Argyle, released quietly last month; it’s based on interviews with wholesalers, national distributors, publishers, retailers and industry associations, “in addition to a broad literature review.” The Department of Canadian Heritage contributed key funding for the 9,000-word study, “The Newsstand Channel: Opportunities and Challenges.”

The PMC’s member wholesalers, such as The News Group and Metro News, represent $667 million in magazines sold at newsstands in Canada; the PMC estimates total Canadian newsstand sales at $750 million. Of that total, the study estimates that $106 million in sales are generated by Canadian titles; about 6.7% of the 2,591 titles supplied to retailers by the PMC each month are Canadian.

The study points out the often-overlooked fact that without the importation of foreign magazines, there would be no newsstand channel in Canada. “The income streams from these [foreign] sources serves to ensure the continued existence of a viable national marketing channel for Canadian publishers,” Argyle writes. The challenge is: how to increase sales of Canadian titles on Canadian newsstands? Argyle found that: (i) publishers want to increase their newsstand sales; (ii) distributors want to increase the sales of their domestic clients; and (iii) “retailers, who exercise control over title selection, stated their high regard for the quality of Canadian magazines and their desire to partner with Canadian publishers in further developing the single-copy market.”

However, the study found that “[v]arious sectors of the industry continue to express a degree of mistrust toward each other. This is a situation that can only be addressed by an open willingness of all parties to recognize each others’ concerns, and to work toward addressing them.” Hence the B.C. pilot project, which would focus on single-copy sales of regional magazines based in B.C.

The PMC proposes a “Best of Canada” marketing program, including public promotions, enhancing retailers’ awareness of Canadian titles and building publishers’ skills in engaging the mass market as well as bringing the talents of wholesalers to bear. “The next step is that we will shortly be submitting a proposal to secure [Canada Magazine Fund] support for the B.C. pilot program,” said Argyle in a recent interview. “We hope to roll it out in the second half of this year.” The magazines involved would include Vancouver, Western Living, BC Business, Gardens West, Business in Vancouver, Okanagan Life, Porch, Geist and Pacific Golf.

January 26, 2006
Chatelaine loses two more, but gains one
TORONTO—After almost five months of searching for someone to succeed Kim Pittaway as editor of Chatelaine, staffers found out yesterday that executive editor Beth Hitchcock is quitting. Her last day will be Feb. 3. She joined Rogers’ largest magazine in 1999 as an associate editor. She has been serving as acting editor since Kim Pittaway resigned in August following editorial interference from upper management. “The last few months have been really hard,” Hitchcock says, “We’ve been understaffed, so it’s been hard shouldering that. I’ve done the best I can but…I think it’s time for me to try something new.” Her plans? “I’m now taking calls,” she joked. “I’m terrified slash excited.”

Responding to an e-mail query last week regarding when Pittaway’s successor might be selected, Chatelaine publisher Kerry Mitchell said the company has “been conducting a thorough search for the next editor-in-chief and I do look forward to making an announcement soon.” Says Hitchcock: “We’ve been hearing ‘soon’ for a while. I hope for the staff’s sake that it’s soon.”

Also quitting is senior designer Kim Zagar (art director Caren Watkins quit last month). Zagar joined the title last summer and will be leaving at week’s end. “I just really want to go back to the freelance lifestyle,” she said, noting that she will continue to do work for the magazine.

Chatelaine did, however, gain a body this week. Craig Offman will assume Hitchcock’s title of executive editor. Married with three kids, he has worked for Wired, Vanity Fair, Salon, Variety and Time. Offman, a Canadian, attended McGill University, Johns Hopkins University and is a graduate of Harvard’s Radcliffe Publishing Course. He recently relocated to Canada from the States and started at Chatelaine on Monday.

January 23, 2006

André Préfontaine
Transcon’s Préfontaine: Was he pushed or did he jump?
MONTREAL—“It’s not that simple,” says Transcontinental Inc. spokesman Jean Blouin. In a surprise move today, the company announced the “departure” of André Préfontaine, president of the Media division.

“André and [Transcontinental Inc. CEO] Luc Desjardins met during the weekend, and they made an evaluation and an assessment of everything that has been going on in the media sector and there were differences of opinion with André on the management of the media sector, how should it be managed,” said Blouin, vice-president of public relations. “And it was agreed on this basis to end our relationship with André.”

Blouin said that Préfontaine and Desjardins share the “same vision” for the media sector. “I don’t think there were differences on the vision,” Blouin said. “It’s more on the implementation of the vision; more of, ‘what do we do on a day-to-day basis to manage this sector toward the objective we have as a company?’ More of these kinds of things.”

Préfontaine joined the company in December 1996 as head of its fledgling media division, which at the time was a ragtag collection of community newspapers. Largely through acquisitions, he built Media into Canada’s largest consumer magazine publisher and significantly buttressed its community newspaper holdings.

Reached at his home this afternoon, Préfontaine wouldn’t say much. “I’ve not left the company yet,” he said, noting that he will stick around to work out transition issues. Asked if he had another position lined up with another company, he said no. So, his plans are? “I’m going to take a little time to think about it. I’ve been working full-time since I was 17.”

Préfontaine is also chair of The Canadian Press, a position he will soon be resigning from since board members must be employees of member companies. Another side effect of his departure from Transcon is that he must resign as chair of Magazine Canada’s taskforce on the state of the newsstand. A speech he was scheduled to deliver to The Canadian Club on Feb. 7 at Toronto’s Royal York is up in the air. The Club said it will make an announcement tomorrow.

January 19, 2006
Rogers wins bid for Canada Post mags
MONTREAL—After an 11-year absence from the shelter category, Rogers Media announced yesterday that, thanks to a distribution deal with Canada Post, it’ll be adding a twist to the category in September 2006—just in time for the Christmas rush.

Last summer, Canada Post invited publishers to propose a magazine designed for those who’ve recently changed addresses (see News Archives, Aug. 23, 2005)—roughly 1.2 million Canadians do so each year. Yesterday, Rogers announced that it had won the bid and that it would be (i) relaunching Canada Post’s service-oriented Smartmoves/Déménageur magazine on April 3 (frequency three times a year, total circ 1.2 million; will sell advertising ); (ii) launching a new, yet-to-be-named shopping/shelter magazine with a controlled circ of 200,000 English-language copies and 50,000 French-language copies produced by Rogers’ bilingual editorial team based in Montreal, and will sell ads and sell on newsstands. This over-sized, perfect-bound shopping-décor hybrid will publish three issues this year and six in 2007. “This is a brand that we will own,” said Rogers senior vice-president Marc Blondeau, of the unnamed magazine; Smartmoves/Déménageur is owned by Canada Post. Blondeau declined to share the terms of the contract or whether Canada Post would be sharing in the profits, should there be any.

Blondeau noted that privacy legislation prohibits the post office from sharing the names of recipients with Rogers, however, when recipients of the décor magazine opt in for a paid sub, their identities would then be added to a Rogers’-owned list.

“We have wanted to be in this category for a while,” said Blondeau in an interview this morning. Indeed, the last time Rogers (which acquired Maclean Hunter in April 1994) had a shelter book was in December 1994 with a glossy called City & Country Home. C&CH launched in 1982 and did well in the gloriously decadent 1980s but the rafters cracked in the recessionary early 1990s and Rogers killed the title in December 1994, around the same time that Telemedia rebranded Canadian Select Homes into the now-successful Style at Home. The shelter category has posted consistent double-digit gains for the past five years, according to LNA Canada. Blondeau says the contract to produce the new titles mean the creation of 18 full-time positions, with the search on for the publisher and editor. The publisher will report to Chatelaine publisher Kerry Mitchell, who will report to Marc Blondeau, while Lise Ravary, recently appointed editorial director of all Rogers’ women’s titles and new projects, will oversee the editorial side.

Some might wonder how Rogers, which has in the past denounced Canada Post as a rapacious, rate-hiking monopoly, can so easily climb into bed with the same, heavy-breathing beast. “We still have our grief about the Publications Assistance Program and postal rates,” said Blondeau, “[but] they went to tender wanting to do this and we’ve done our homework and were able to successfully sign this contract, which doesn’t mean that we don’t have conflicting views on postal rates…We’ll be paying regular postal rates [on the new title]…and so I think it will open their eyes as to what this means in terms of postal rates and the cost of [putting out] a magazine.”

January 17, 2006
Former Saturday Night editor to oversee city mag
VANCOUVER—After a week of rumours that an editorial shake-up was in progress at Transcontinental Media’s glossy city magazine, Vancouver, the company announced yesterday that it had indeed fired its editor.

Gary Stephen Ross lands a job closer to home
Matthew Mallon was let go last week after about three years in the slot and former Saturday Night editor Gary Stephen Ross will take over starting next week. Kim Peacock, group publisher of Transcontinental’s Western publications (Vancouver, Western Living and Guest Life), said with the city of Vancouver currently undergoing tremendous growth, Transcontinental needed a business-minded editor. “We needed to make the editor’s position at Vancouver magazine a full management position, which it hasn’t been,” says Peacock. Jim Sutherland, editor of Western Living, has long been part of the management team at Transcon West and was, until this news broke, also editorial director, a position he fulfilled during Lance Neale’s leadership (Peacock’s predecessor), with Mallon reporting to Sutherland. With the arrival of Ross, Sutherland sheds the editorial director title and Ross will report directly to Peacock. Sutherland says Mallon “put out a really lively and entertaining magazine…but really wasn’t interested in playing a managerial role.” Mallon could not be reached for comment.

For his part, Ross is delighted. Not so long ago he was being pink-slipped by St. Joseph Media. After just 14 months as editor of Saturday Night—and four days after his 57th birthday—St. Joe announced on Oct. 20 that it was putting the magazine “on hiatus.” It was his first editorship after a long career of being John Macfarlane’s sturdy 2IC at Toronto Life and Weekend magazine in the 1970s and then senior editor at Robert Fulford’s Saturday Night from 1980-87. Now, as editor of Vancouver, the commute is certainly easier—Ross lives just minutes away from the city, in White Rock, whereas before he had to live in Toronto half the time. “It seems to me full of potential,” says Ross of the magazine. “In a way, I would say, the city has grown up around the magazine. In a way, I think the city has got ahead of the magazine, if I can put it that way. Or, to put it another way, I look at Vancouver as being where Toronto Life was 15 or 20 years ago.” What will his Vancouver look like? He can’t say just yet. “I want to arrive at that through consensus rather than mandate or dictatorial statement. It’s a collegial effort and I want to make sure everybody buys in.” He starts this Monday.

Publisher Peacock says with the city growing so quickly and the 2010 Olympics driving much of the optimism, there are plans to grow existing publications and add new ones, notably a shelter magazine for condo dwellers that will debut in May as an annual with the possibility of increased frequency next year. Interesting to note that a couple of years ago Ross was involved with a group that wanted to launch a shelter mag for condo dwellers, to be called Square Feet. He says he shopped it around to publishers here and stateside but found appetites peckish. Transcon was approached, he recalls, “but it was the wrong person at the time, and barely got the time of day from them.” This time, things look different. “I’m looking forward to it,” says Ross.

News bulletin
BIG’s 36 trade magazines sell to Glacier
VANCOUVER, CHICAGO, TORONTO—It’s happened. After more than 10 years of foiled attempts by interested suitors to acquire Hollinger’s (formerly Southam’s) group of trade magazines, a deal has finally been reached. The news spread across wire services last night.

Vancouver-based Glacier Ventures International announced that it will indirectly acquire Chicago-based Hollinger International’s 87% stake in Hollinger Canadian Newspapers Limited Partnership for $117 million. Glacier says it anticipates acquiring the remaining equity in HCNLP from stakeholders, which would bring the total value of the deal to $134.8 million, expected to close Feb. 3.

What exactly did HCNLP sell? The following: (I) Toronto-based Business Information Group, headed up by Bruce Creighton; (ii) a group of 25 daily and weekly community papers, mostly in B.C.; (iii) the Real Estate Weekly and Kodiak Press in Vancouver; (iv) the Sherbrooke Record and Brome County News, located in Quebec.

In a $40-million deal last month, Glacier acquired a 50% interest in HCNLP’s string of Alberta community papers (Great West Newspaper Group) and a 50% interest in Fundata, a Toronto-based publisher of investment-fund information made available in electronic and print formats (see News Archives, Dec. 21, 2006). The combined revenue and EBITDA of all HCNLP interests Glacier has acquired thus far is approximately $105 million and $18 million respectively, which means that Glacier paid a multiple of 9.7 of EBITDA, considered by industry watchers to be a respectable premium.

The sale value of BIG was not itemized but assuming BIG has revenues of $35 million and a 10% EBITDA, given the 9.7 multiple the sale price would be $34 million. Reached this morning, BIG CEO Bruce Creighton confirmed that he is “staying on board and [is] actually very excited about working with Glacier and [CEO] Jonathon Kennedy.” Asked whether any of BIG’s titles will be sold off, Creighton said, “I’ve had no conversations on any of that,” which suggests that Glacier will not part the operation out. Asked whether BIG’s Internet play at esourcecanada.com will now be fortified by Glacier’s other trade and professional titles, Creighton said, “I think there are all kinds of business opportunities.” He declined to comment on whether he will hold an equity stake in Glacier, a company that has a reputation for retaining and extending equity to existing management, provided they perform.

In a profile of Glacier CEO Jonathon Kennedy written by former Profit editor Rick Spence in the January/February issue of Masthead, Kennedy says that Glacier offers management “the privilege of autonomy on the promise of performance.” Masthead’s January/February issue began mailing to subscribers this week.

January 12, 2006
Abandon Food&Drink , grant tax credit, gov’t told
TORONTO—Ontario Minister of Finance Dwight Duncan asked Magazines Canada what he could do to strengthen the industry, and the industry has answered.

In a document submitted to Duncan on Dec. 15, Magazines Canada recommended that the provincial government do the following: (i) stop subsidizing Food & Drink magazine with taxpayers’ money, and (ii) put us on par with other tax credits already offered to television, film, music and digital media.

Food & Drink is the 523,000-circ controlled-circ glossy bimonthly that sells millions of dollars worth of inexpensive advertising (CPM of $33) in competition with private sector publishers, such as Vines (CPM of $147). F&D is published by the Liquor Control Board of Ontario, the booze monopoly operated as an agent of the provincial government.

As for the tax credit, Magazines Canada has been going after it for years, and each year it never turns up in the budget. This time, however, the association has released detailed recommendations as to what a tax credit might look like. It considers two scenarios: a credit based on operating expenses, and a credit based only on labour expenditures. The total tax credit available to the average Ontario magazine, when based on operating expenses would be $90,000 (20% of the first $200,000; 10% of the next $500,000); the credit when only labour expenditures are allowed would be $41,447 (same formula but the discrepancy is because average labour expenditures are only about $275,000 per title). Assuming an up-take of 60% in the credit program, Magazines Canada anticipates total savings to publishers at $19 million if operating costs are allowed or $9 million if just labour expenditures are allowed. That money could be reinvested in the operation to grow market share of subscription and newsstand circulation, and therefore advertising revenue as well as open up jobs in the industry, creating a new source of tax revenue for the government that would, the association paper states, far exceed the cost of the actual tax credit.

The province is expected to present its budget next month.

January 10, 2006
Publisher sues client for $5.7 million
CALGARY—A publisher is suing Canada’s second-largest airline claiming the carrier breached the terms of a contract.

For six years starting in 1999, Zulu Publications Inc. principal Kevin Parkinson claims to have had a distribution agreement with WestJet to circulate Zulu-owned AirLines magazine. According to the statement of claim filed last Friday in Calgary, Zulu alleges that WestJet (i) interfered with advertising sales, contrary to the terms of the agreement; and (ii) failed to provide sufficient notice to Zulu and terminated the publishing arrangement in September 2004 after Zulu claims to have incurred more than $1 million in media-kit costs and advertising prospect development for 2005.

WestJet subsequently issued an RFP for a new inflight title. Sources confirm that Zulu, St. Joseph Media and Calgary-based RedPoint Media were shortlisted, with the contract going to RedPoint, also named as a respondent in the suit. RedPoint currently produces Up! for WestJet. RedPoint could not be reached for comment, nor could WestJet, though the latter has declined to comment on the case to other media. Zulu is suing for $2.21 million in general damages, $3 million in special damages and $500,000 in aggravated damages.

One independent industry observer who did not want to be identified described the suit as a “nuisance claim” designed to expedite a settlement between Zulu and WestJet, which the two companies failed to reach during negotiations last year.

January 5, 2006
Whyte adds salty batch to the masthead
TORONTO—Kenneth Whyte continues to assemble his editorial team since becoming Maclean’s publisher and editor in March 2005. Yesterday he announced the arrival of an eclectic mix of columnists, editors and writers.

Sarmishta Subramanian
They are: (i) former This Magazine editor and Walrus deputy editor Sarmishta Subramanian, who comes aboard as a senior features editor; she was most recently at The Sunday Star; (ii) columnist Anne Kingston and crime/politics reporter Michael Friscolanti, who have been poached from their gigs at the National Post and named senior writers, of which Maclean’s can now boast five (the others are Brian Bethune, Danylo Hawaleshka, and Brian D. Johnson); (iii) assistant editor Barbara Righton, who becomes a full-time associate editor; (iv) arts blogger Jaimie Weinman (“Something Old, Something New”), who joins as assistant editor, degrees in law and English in tow; (v) Andrew Potter, an academic philosopher and scholar and former This Magazine editorial board member, who will write a regular column on public affairs; he is co-author of The Rebel Sell: Why the Culture Can’t be Jammed (HarperCollins Canada, 2004); and, (vi) Mark Steyn, the openly heterosexual Christian conservative columnist, who will write a weekly books column.

Gone, as of last month, is Peter Mansbridge’s column after three years and soon to be gone is editor-at-large Ann Dowsett Johnston, the mind behind Maclean’s University Rankings project; she has accepted a five-year term as vice-principal, development, alumni and university relations, at McGill, effective Feb. 6.

January 4, 2005
Art director quits Chatelaine

Caren Watkins
TORONTO—There’s new blood at Azure and The Walrus and as Chatelaine enters its fifth month without an editor, its long-time art director has quit. Caren Watkins was appointed Chatelaine’s AD almost 11 years ago, about the same time that Rona Maynard was appointed editor. Watkins announced last month that she would depart on Dec. 30. “I’m considering a number of options within the magazine industry,” she says. “After working successfully with two editors over 12 years I feel it’s time for me to explore new opportunities.” Deputy art director Daniel Mackinnon will lead the art department until a successor is named, said executive editor Beth Hitchcock.

Hitchcock herself has been leading the editorial team as acting editor for the past four months following the defiant August resignation of Kim Pittaway, who refused to be the “hand puppet” of publisher Kerry Mitchell (see News Archives, Sept. 1, 2005). Chatelaine is Rogers Publishing’s largest magazine, with a paid circ 636,000 and estimated advertising and circulation revenues in 2004 of $37.3 million. But the big glossy must now work around huge voids in both the editorial and art departments. Rogers has conducted an extensive search for Pittaway’s successor—taking out at least one want-ad in the British press—but to no apparent avail. Mitchell, formerly publisher of Profit, took over as publisher of Chatelaine late 2004. She could not be reached for comment.
Andrew Clark
Catherine Osborne

Meanwhile, The Walrus has a new managing editor in Andrew Clark, who was a senior writer at Maclean’s (1998-2000), a regular contributor to Saturday Night and remains a comedy critic for The Toronto Star. Clark has also authored two books: A Keen Soldier (Vintage Canada, 2004), about the last soldier to be executed by Canada’s military, and Stand and Deliver (Doubleday Canada, 1998), a chronicle of Canadian comedians. Clark calls his new job a “good fit” as he’ll both continue to write as well as engage in the nuts-and-bolts duties of an ME. He took up duties mid-November, working alongside then-ME Catherine Osborne who helped transition Clark into her role. Osborne, of course, moved on in mid-December to take up senior editor duties at Azure, the oversized bimonthly on architecture, design and art. “I think this is a better fit in terms of my personal interests,” she says. Osborne, lest we forget, was formerly editor and co-founder of Toronto arts quarterly Lola, which launched in 1997 and folded in the summer of 2003. At Azure, she’ll also serve as editor of the spin-off DesignLines (a digest-sized binannual for the Toronto market and an annual in Montreal), which may expand to other urban markets.

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