Michael Sifton strolls out the front door of his Markham office carrying a Tim Hortons coffee. It’s before 7 a.m. and Sifton’s Cadillac SUV is the only car in the lot. I am joining Osprey Media Group’s president and CEO for a drive to one of his newspapers, The Barrie Examiner. Today is not a typical trip, though. At a scheduled meeting with his publishers, Sifton will announce a new benefits package for workers at Osprey’s non?unionized newspapers-he says the announcement shows that, despite three recent labour disruptions, the company is investing in employees and boosting morale.
It’s lightly snowing as we edge along a back route from Markham to Highway 400. Sifton talks like he leads, with confidence and conviction. His honesty is his greatest attribute-and perhaps his biggest flaw. Sifton speaks candidly about his deep distaste for unions, blaming them for Osprey’s setbacks. Nevertheless, he is disappointed that collective bargaining agreements prevent workers at his unionized papers from taking advantage of his new package.
Labour woes aside, Sifton is upbeat. He meets his chief financial officer, John Leader, in the Examinerparking lot, where they joke about sporting the same corporate uniform: navy pinstriped suits. Inside, employees greet Sifton with updates on their latest projects. He talks to one about a mitten drive for the needy and inquires about another’s deceased father.
Upstairs, in the Examiner‘s loft-style meeting room, Sifton calls the group to order. He casually leans on the podium while he gives his unrehearsed introduction. Sifton, 43, calls the new package an evolutionary step that will standardize benefits across the company. After his quick remarks, he grabs a muffin and coffee and sits across the room while Leader follows with a brief PowerPoint presentation. Sifton adds to his CFO’s talk, pausing to make sure the group understands details of the plan, like which costs the company will cover. Overall, the publishers are receptive to the plan, which Sifton says is more tax effective. After the meeting, the room buzzes with talk of trade secrets sales skills, and praise for the plan. Later on, Sifton leads a tour around the Examiner‘s new premises, a Beaver Lumber store he revamped during his tenure at Hollinger International Inc.
Osprey was created almost two years ago, when Sifton bought 29 papers, including The Kingston Whig-Standard, from Conrad Black’s Hollinger. In late January of this year, the company ended nine months of negotiations with CanWest Global Communications and scooped up more southern Ontario assets, including four dailies: the St. Catharines Standard, the Niagara Falls Review, the Welland Tribune, and the BrantfordExpositor. The company is focused on acquiring daily and weekly Ontario newspapers outside major metropolitan markets and is expanding rapidly. It currently has over 60 daily and weekly papers, with a total Ontario circulation of 1.3 million.
In the newspaper business there are two types of owners-those who love newspapers and those who don’t. Sifton has been called both a paternalist and a capitalist, celebrated for his avuncular leadership and his lack of micromanagement, and condemned for embracing modern financial realities. He takes pride in being the folksy CEO who greets employees on a first-name basis-like his father-yet wants to be respected for his own accomplishments. He bought a preexisting newspaper chain at top market value and was recently embroiled in a number of lengthy labour disputes. Still, Sifton is smartly amassing a collection of small-town products with little or no competition. Can the fourth generation newspaperman run Osprey like a family business and still be ruthlessly corporate when it comes to the bottom line?
Outside the Cobourg Daily Star In downtown Cobourg, five picketers stand bundled in toques and scarves, carrying signs that read “Local 30248 on Strike.” The group is a mixture of Daily Star employees and workers from the Port Hope Evening Guide, both Osprey papers that have been on strike since October 11, 2002. It’s now three weeks before Christmas and the end is nowhere in sight.
Northumberland Publishers, a subsidiary of Osprey, has filed a complaint with the Ontario Labour Relations Board citing unfair labour practices by the union. The newspaper company asked the board to declare that the Communications Workers of America (Local 30248) breached its duty to bargain in good faith by coercing and manipulating its members, referring to the union’s generous strike pay as evidence. Guide andDaily Star employees were paid $500 per week in strike pay, more than most of the paper’s part-time workers earn in salary. In Sifton’s opinion, “The union has bought the strike. It’s Christmas come early.”
But employees at the papers deny that the high strike pay is preventing them from settling with the company. Gord Bullock, a scanner operator from the Daily Star, says, “The publisher [Mike Walsh] and Mike Sifton think we’re staying out longer because we’re being paid well-that’s not the case at all. Who wants to stand outside in the cold?” (A few months later, Bullock and Sifton would be equally at odds over Bullock’s fate post-strike. Bullock said he was laid off on March 5; Sifton’s interpretation was that his contract was not renewed.)
In the initial negotiations, Osprey offered pay increases of 2.5 percent in the first year and two percent in the next two years, which the union thought was insufficient. Nigel Sones, the business agent for the local, says the union wants cost of living, calculated by Statistics Canada in July 2002 as 2.9 percent. John Miller, head of the newspaper stream at Ryerson University’s School of Journalism, says, “Sifton pays his reporters peanuts. “Top-paid reporters at the Guide and Daily Star earn $522.65 per week, about $250 less than their counterparts at the Osprey-owned Peterborough Examiner. Miller, who showed his support at the picket line, thinks Osprey’s ailing finances contributed to the strike. “Sifton paid a lot for the papers, which means he’s heavily in debt,” he says. The strikers disagree. They claim that the company is making money-profit that’s not trickling down to the local level. According to the union’s literature, “The truth is that, year after year, contract after contract, employees have been promised better wages when there are better times. Unfortunately, when the better times arrive, the company continues to under-pay and under-value its employees.”
Strikers are frustrated with the company’s top-down negotiating tactics. “Management was proposing to take away sick days,” says one employee on the Daily Star line. Currently, Guide and Daily Star employees are entitled to three-quarters of a sick day per month, but Osprey proposed eliminating three from workers’ contracts. “Sick days are X numbers of days that an employee gets to claim that they’re sick,” says Sifton, “so they’re really additional holidays.” On December 5, 2002, the company met with the union to renegotiate the original three-year offer. Instead of agreeing to cost of living, Osprey spread the increases over four years and the union dismissed the proposal as a copout.
During negotiations, Osprey did adjust the dental plan and mileage compensation and put forward special increases for certain job classifications, including composing, flyer inserting, and advertising But a wage comparison after the adjustment reveals that workers at the Guide and Daily Star still earn less than most employees at other Osprey papers. Composers make $13.05 an hour, while their counterparts at the Lindsay Daily Post are paid $16.02 an hour and at The Peterborough Examiner $20.56 an hour. Sifton attributes the wage discrepancy to size-circulation at the Guide and the Daily Star averages 3,078 and 5,335, respectively-and a shoestring budget. “In a small business you don’t have the ability to pay the same as a big business,” says Sifton. “The company’s gone as far as it can go. We’ll operate the way we have to operate.”
Osprey published both papers with the help of managers from its other properties. In early December, union workers from the papers gathered at Queen’s Park in Toronto to support the New Democratic Party’s antiscab legislation, but their enthusiasm got them kicked out of the legislature. That same day the group picketed Osprey’s headquarters in Markham, with signs proclaiming “Michael Sifton: Scab Boss,” “Conrad Black Come Back, All Is Forgiven,” and “Osprey Media: Scab Inc.” In a newsletter detailing the events, the union criticized Sifton’s absence at the protest, but he counters, “I can’t communicate with these folks by law because it would be considered bad faith bargaining.”
The union and the company met for a second time on February 5, 2003, but the bargaining session was a bust. The union rejected the company’s latest offer (2.5 percent in the first year, two percent in the next two years, and a total increase of three percent in the fourth year) by a margin of almost 70 percent. However, less than two weeks later, the union revoted 62 percent in favour of the deal after the company refused to arbitrate. The settlement includes severance packages for full-time and part-time employees laid off during the nine months following the strike.
Employees returned to work late February and began rebuilding the credibility of the papers, which some speculate is in jeopardy. In an article for The Independent, an online publication, Miller wrote that during the strike, “Coverage of local issues has declined, several advertisers have pulled out, and reader cancellations have put a dent in pre-strike circulations.” According to Osprey’s figures, though, the dent is really only a nick: by the end of the strike only 44 and 66 subscribers deserted the Guide and the Daily Star, respectively. The 110 cancellations amounted to a miniscule 1.3 percent drop in total circulation. But the scab-produced papers had their share of typos; the first issue carried a picture of a boat on the water with a headline that read, ‘Saling along.’
In light of the recent strike, Sifton’s announcement in Barrie might seem ironic-he antes up at the nonunion shops, yet leaves workers at two unionized papers pacing outside in the cold. Sifton credits his attitude about unions to his background and says, “We worked very hard to keep it nonunion.” His father instilled in him a familial management style where one-on-one negotiating warded off the threat of organization. Although Sifton has defeated several union drives, over half of his papers are unionized. He says, “More and more of what we’re seeing is this interest from the unions in targeting Osprey.”
Although both strikes ended mid-February (and a three-month lockout at the Sudbury Star ended in late January), Osprey is not yet in full flight. The company is carrying a debt load of close to $500 million from the Hollinger and CanWest purchases. Some believe the Hollinger buys were made when the papers were at top market value, which may be affecting Osprey’s ability to pay competitive wages. But Doug Knight, former Financial Post publisher and president and CEO of Knight Paton Media Corp., says Sifton cleaned up in terms of earnings before interest, taxes, depreciation, and amortization. “Mike paid less than eight times EBITDA for the papers from Hollinger, which is extraordinary. In the United States, the same papers are going for 10, 11, 12 times EBITDA.” Plus, Osprey has strong financial backers, including the Ontario Teachers’ Pension Plan and Scotia Merchant Capital. Sifton and his merchant bank partners are considering turning Osprey into a publicly traded commodity, but he says, “I don’t think it will occur for at least the next 12 months.”
In July 2001, the company began operations by purchasing 16 daily and 13 weekly Hollinger properties. Then in November of that year, it bought two more dailies, the Sarnia Observer and The Chatham Daily News. On January 27 this year, it paid $193.5 million for CanWest’s four small daily and 21 weekly southern Ontario newspapers. This last buy almost doubled the company’s size, making Sifton the owner of more daily newspapers than anyone in Canada, outranking Sun Media (Quebecor), with 15, and CanWest, which now runs 13 big-market dailies.
While Osprey’s financial status is top secret, it is palpable that the company’s got a stronghold on the community newspaper market. Sifton’s strategy combines the old Thomson model of maintaining a war chest of smalltown papers-papers that usually have zero competition because the communities aren’t large enough to support more than one-with a tight geographical focus. “We like the characteristics of smaller newspapers,” says Sifton, “where there’s a special bond between community folks and their daily or weekly newspapers.”
Employees at the St. Catharines Standard, Osprey’s new flagship, are rejoicing about its new ownership. The paper has been through a series of ownership changes recently, jumping from Southam to Hollinger to CanWest, and is feeling secure about its future with Osprey. Andrea Kriluck, The Standard‘s region editor, believes the paper is an excellent fit with Osprey’s existing portfolio. “The Standard is very much a community paper,” she says.
According to Fred Laflamme, publisher of the Whig-Standard, Sifton’s philosophy is respect for the bottom line equals respect for the byline. Kriluck says, “Mike Sifton is a man who has a long history in newspapers. He really understands what newspapers are all about.” Laflamme adds, “He absolutely respects the integrity of the local newspaper. His view is the newspaper knows best what’s happening in the local marketplace.”
Eric Reguly, business columnist for The Globe and Mail, says Osprey is positioned to become a force in the small to medium-size newspaper market. Because most of Osprey’s papers are monopolies, they are insulated from having to compete locally for advertising. But the Toronto Star’s David Olive says, “It’s too early to speculate about who might emerge as the dominant owner.” Compounding Osprey’s labour challenge is its need to compete with community newspaper giants like Metroland, a Torstar subsidiary, and Knight Paton Media Corp. The strikes in Port Hope and Cobourg cost Osprey its advertising contract with Canadian Tire-the money went to Osprey’s nemesis, Metroland.
Osprey competes with Torstar for ads and readership, especially around the Greater Toronto Area. “Torstar’s strategy is to build a ring around Toronto,” Reguly says, “to lock up all the advertising from Oshawa to Hamilton and north to Barrie, in the economic heartland of Canada.” But Sifton isn’t concerned. He jokes, “I should have a real negative relationship with [Star publisher] John Honderich. John goes into my markets and gives away the Toronto Star. You go into a store in Barrie on a Saturday, and there are big racks of free newspapers.”
Sir Clifford Sifton, a newspaper publisher from Brandon, Manitoba, founded the Sifton newspaper dynasty in 1899 when he bought the Manitoba Free Press (later the Winnipeg Free Press) from the Canadian Pacific Railway. The empire was passed on to two of Sir Clifford’s five sons, Clifford Jr and Victor, but was divided by a family quarrel in 1953. Victor got the Winnipeg Free Press and the rural Free Press Weekly. Clifford Jr , Sifton’s grandfather, took the Regina Leader-Post, the Saskatoon Star Phoenix, several radio and television stations, and a few smaller companies and properties. In 1960, he formed Armadale Communications, the family’s holding company, which also operated the Toronto Buttonville Municipal Air-port (still Sifton-owned), and founded Toronto Life magazine in 1966.
As a boy, Sifton travelled to Saskatchewan with his father and used the presses at the Leader-Post and theStar Phoenix as jungle gyms. In the newspaper business, he went from cub reporter at The Brockville Recorder and Times to reporter at the St. Catharines Standard and the Canadian Press, to cooperative advertising salesman. In 1992, he became publisher of the Star Phoenix and the Leader Post, relocating his family to Saskatoon. Bill Peterson, editor of the Star Phoenix at the time, says Sifton was “this 30-ish guy who wanted to get really involved-he just had a different approach than his dad.”
Peterson remembers meeting Sifton’s father, Michael Sr., in 1972 when he was working as a night copy boy at the Star Phoenix. “I’d been there a couple of months. I was working away one night, and I looked up and there’s Michael Sifton Sr. coming to introduce himself. Scared the crap out of me. But he was a gentle, approachable guy.” Sifton’s father knew every employee by name, despite only visiting his papers a handful of times per year. But the family was most famous for its benevolent newspapering and no-layoff policy-during the Depression in the 1930s, amid wholesale-layoffs elsewhere, the Siftons never jettisoned a soul.
Today, many westerners haven’t forgiven Sifton for the sale of the Leader-Post and the Star Phoenix to Conrad Black in 1996. The papers had been the twin jewels of the Sifton empire since 1928; Sifton blamed the sale on Saskatchewan’s shrinking tax base, and more importantly, the need for a new press, which at the time came with a steep $15 million price tag.
The sale was finalized on February 29, 1996, and Black appointed Sifton chairman of the Sterling group of newspapers. Sifton’s first big move as a Hollinger executive was to fire roughly 170 employees from the two papers he’d grown up with, an order he fulfilled two days into the new regime. At Hollinger, Sifton began creating a new culture-still evident at the papers he bought from Black-appointing new publishers, senior management, and support staff. He standardized the ideology of his employees, preferring community-conscious and volunteer-oriented individuals. Anyone who didn’t merge with the company’s new business philosophy was dismissed. “They just weren’t the right folks to lead the operations the way I wanted them led,” says Sifton.
Sifton sits beside his large oak desk, behind which his father governed Armadale. His Markham office is large and mostly bare. Above his desk, on a map of Ontario, colour-coded pushpins track Osprey’s properties and its competition. Sifton shows me a photograph of an osprey bird in flight, the winner of a company-wide photo contest. Under the window are photos of his two daughters, 15 and 13, and his son, eight, whom he rarely spends much time with during the week. His routine is rigorous-in the office by 7 a.m., and while he’d like to be home by 7 p.m., it’s rare that he is. But he’s a hockey dad on weekends, conducting conference calls between games.
Sifton plays Osprey’s multimedia CD-ROM on his laptop. Images of beaming faces flick on and off the screen, while testimonials boast that Osprey’s papers connect communities. Sifton sits watching quietly until the words “past,” “present,” and “future” fade in and out of view, followed by black and white photographs of his ancestors. Sifton’s voice booms from the speakers, “Newspapers are in my blood….You could say I’m perpetuating the tradition.” He grumbles, “I hate that part.”
But despite his family’s success, Sifton’s colleagues don’t connect his accomplishments to lineage. Paul McCuaig, publisher of the North Bay Nugget, says Sifton’s ancestry “looks good on a resume or a corporate video, but it doesn’t draw much water.” Don Babick, retired president and chief operating officer of CanWest Publications Inc. (formerly Southam), concedes that Sifton’s father may have influenced his decision to pursue a career in newspapers. But he adds that Sifton secured his own reputation in the industry by being part of the team that restructured the Canadian Press from 1996 to 1999 and saved the venerable newswire from bankruptcy “He is an extremely good operator who is passionate about the business,” says Babick.
Sifton personally reinforces the company motto, “Building Better Communities.” According to Laflamme, Sifton thrives on his regular tours of newsrooms. “He’s done it 16 times before,” the Whig-Standard publisher says, “and there’s nothing new to see except staff members. But that’s what it’s all about.”
Outside Sifton’s office window, planes rumble out of Buttonville. Although he’s surrounded by the past, Sifton says he’s moved on. “It’s not the fact that my great-grandfather was a publisher-it’s because this is me,” he says. “I’m not doing this because of some tradition.”
For a man who refuses to see himself as a scion, Sifton still acts very much like the paternalistic manager of a family-owned business. He prefers dispensing gifts to loyal employees rather than negotiating with union bosses. McCuaig says succinctly, “He expects a certain level of performance and a day’s work for a day’s pay” And indeed, Sifton is strategic, pragmatic, and forever focused on making his papers profitable.
Going forward, Osprey’s future hinges on Sifton’s ability to manage his hybrid of family values and corporate governance. So far, despite the union woes, his balancing act seems to be working.