Mc Paper North?

A Canadian daily wants to be an upscale USA Today

Following an old journalistic maxim, press mogul Conrad M. Black likes to afflict the comfortable--at least when the comfortable run rival newspapers. His Chicago Sun-Times, Jerusalem Post, and London Telegraph group have made some inroads against more upscale or widely read competitors. Now, the Canadian is about to shake up the news business at home. In early April, he is expected to take a page from Gannett's 16-year-old USA Today and announce plans for a Canadian national daily.

Canada Today--as some rivals disparagingly call his so-far unnamed paper--is already making waves. The country's leading national daily, the Globe and Mail, and the big-selling Toronto Star have been upgrading their pubs for months. Since the main battleground will be Toronto, home of four papers, a newspaper war seems unavoidable. Says John A. Honderich, publisher of the locally focused Star: "The pressure is going to be huge for some kind of rationalization."

In fact, Black's own empire--the third-largest newspaper operation in the world behind News Corp. and Gannett--will feel some heat. Through his $2.2-billion-a-year Chicago-based Hollinger International Inc. and its 58.6%-owned Canadian subsidiary, Southam Inc., Black controls 55 U.S. and 63 Canadian dailies. And the new paper will almost certainly take ad dollars and readers from some of his other Canadian operations. "There is potential cannibalization on advertising, but we think it's manageable," says Donald Babick, publisher of the Vancouver Sun and Province and president of Southam.

Still, Black, 53, has critical advantages. With Hollinger operating income up fourfold since 1995, to $287.2 million, he can easily absorb the $70 million or so in costs from the new venture over the next five to eight years. He'll use his local presses to print the daily while distributing it with the local papers. And he'll aim it at more upscale readers. "We sell 2.4 million papers a day in the country now," he says. "To sell 300,000 more doesn't seem, on its face, too high a mountain to climb."

Black admits launching the newspaper would be a "slog." Gannett's USA Today cost "hundreds of millions of dollars" and took five years to show a profit, says founder Allen H. Neuharth. Black expects losses to be lower with profits likely in just a few years.

Unlike Neuharth, Black won't have much flag-waving nationalism to bank on among the less fervent Canadians. The mogul says many of his countrymen feel a "comparative lack of national cohesion." But he adds: "We can help to fill that gap." If he does, his discomfited rivals may see a few gaps of their own.

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