This is crap…it’s truly dreadful. This headline doesn’t tell me anything. I don’t want to read such a piece of shit.” Tony Sutton, the in-house design consultant for Thomson Newspapers Corp., is critiquing the prototype of a new Sunday edition of The Daily Mercury of Guelph, Ontario. He’s standing in his office on the 24th floor of Thomson headquarters in downtown Toronto, amidst chaotic piles of the many newspapers and magazines he’s redesigned for clients around the world: Drum magazine, Rapport, City Press, the Financial Times of Canada, and The Globe and Mail among them. A self-described “journalist who happens to design” and a newspaperman since the age of 16, Sutton looks the part: scraggly beard, unkempt hair and cut-rate clothes. At 46, he’s now applying his expertise to the redesign of Thomson’s 163 dailies across North America. The Mercury is the first Canadian paper to undergo his scrutiny, and he’s unsparingly critical of its staffs early efforts.

“The first thing I say to editors is ‘would you buy this?'” says Sutton, in his characteristically blunt fashion. “And the answer has got to be no. When I get things like this, after I have vomited, I produce new samples to show them there’s a better way of doing it.” I t’s no surprise to hear a veteran journalist trashing a Thomson newspaper. The real surprise is that the company is paying for the abuse. Thomson, whose small-town papers have historically been criticized for a skinflint mentality that puts returns before readers, now seems bent on revolutionary change. The old obsession with high profit margins and tight cost controls is giving way to a new corporate focus on giving readers “quality” and “relevant news.”

Leading the revolution is Thomson CEO Michael Johnston, who has engineered a huge shake-up in traditional corporate thinking since he took up his post in 1989. He has some lofty new goals for the newspaper chain that was scathingly criticized by the 1980-8 I Kent Commission for producing a “lack-lustre aggregation of cashboxes.” “Our newspapers will be written well, edited well, printed well,” he says, “and they will contain the news the community wants.” Look after all that, he reasons, and profits will take care of themselves.

It’s now mid-November and the Mercury’s redesign is already three weeks behind schedule.
And although Sutton usually recommends a four-page wraparound, publisher Stephen Rhodes has produced a full 24-page mock-up. Sutton is clearly displeased with the result.

Some page-one headlines are as big as their accompanying stories; others fade in a cluttered grey mass, undistinguishable from the stories they are meant to promote. The body text is so tight and small it’s difficult to read. A couple of “pull-boxes,” traditionally reserved to alert readers to important stories inside the paper, are in this case displaying a hockey score and winning lottery number. “Why do you want to advertise those at the top of the page?” says Sutton. “It’s secondary news.” As he flips to the inside pages, his exasperation intensifies. “This editorial opinion-where is the opinion? Why a national weather map? People don’t give a shit about the weather anywhere else but in Guelph. Often you want to hit people over the head with pieces of two-by-four and say ‘Think. Ask questions.'”

These days, executives at Thomson headquarters are asking questions about their firm’s whole way of operating. The launch of the Sunday Mercury and a concurrent make-over of the 138-year-old daily are part of a general Thomson renewal project aiming to improve the content and design of its chain of newspapers. After almost six decades of doing business on the cheap against little competition, Thomson Newspapers is now forced to spend serious money to fight a host of new threats.
The company is partly playing catch-up against competitive forces that affect the whole newspaper industry. The growth of network and cable TV broadcasts as a prime source of breaking news, for instance, means that Thomson has to redefine how it selects and covers its own news to target true reader needs more precisely. “If you’ve been putting out the same newspaper the same way for 10 years, you’re probably out of date,” says Hunter George, appointed last year as Thomson’s first-ever director of editorial development. “There is an increasing appetite for coverage that affects women, families and the workplace.

Newspapers should reflect that change. It’s nothing more than marketing-tailoring one consumer product, the newspaper, to changes in the marketplace. Society has changed. People want news that affects their daily lives and they’re not getting it.”
At the same time, Thomson is also grappling with competitive pressures unique to its own business situation. As a publisher of mainly small-town daily newspapers, it is acutely affected by a North American trend in which an increasing number of weeklies, giveaways and shoppers’ guides are eroding the traditional revenue base of its dailies. For several decades, Thomson faced little effective local competition, ran its papers parsimoniously and demanded relatively high profit margins of them-leaving little money to invest in editorial quality. The company now realizes it must relax those demands and free up funds to win back its competitive footing. Last year alone it invested $124 million (U.S.) in capital expenditures-compared with averages of less than $18 million annually in the early eighties.

The state of The Daily Mercury suggests Thomson’s typical problems. The paper’s circulation is only 18,500, nearly the same as it was in 1971, although the local population has grown 44 percent since then. Problems differ slightly from market to market, of course, but Thomson has similar goals across the board: to tailor each newspaper’s content and design to appeal to the demographic profile of its community more sharply, and to regain lost circulation and capture new readers from traditionally weak segments of the market, such as women and young adults. At the Mercury, publisher Stephen Rhodes projects that the redesign and accompanying content changes will attract the university crowd and new families in the area, to translate into a circulation increase of 7,000 in just 18 months.

Beyond hiring Sutton and Hunter George to work on newspaper content and design, Thomson chief Johnston has launched a range of other corporate improvements. A new satellite hook-up now links the bureaus of Thomson Newsservice (an in house wire service) with its newspapers; bureaus in Ottawa and Toronto have increased their staff, a new bureau was opened in the U.S. mid-west, and a correspondent has been added in Mexico City. Starting this spring, Thomson papers will carry a freestanding, colourful weekly entertainment tabloid, designed by Sutton, that aims to attract younger readers. And it has already introduced about 200 other new supplements, from Sunday editions to lifestyle and automotive sections, across the chain. To beef up staffing, Thomson created 53 7 new editorial positions last year and plans to add at least another 500 this year. Editors now receive an in-house corporate magazine dispensing professional tips; and all newsroom staff are being trained in writing, editing, design and photography so as to sustain the new quality levels.

Last November, the publishers and editors of every Thomson daily in North America were flown to Nashville, Tennessee for a week-long conference, hosted (and paid for) by head office at a cost of $750,000 (U.S.). No expense was spared in bringing the best minds in the newspaper business to preach the new Thomson motto: quality. The conference was an attempt to jumpstart Thomson newspapers into modern newspaper management. The underlying message to publishers and editors was clear: circulation has to increase-here’s how to make it happen in your community.

“At the conference, it became quite clear that Thomson’s thrust to improve quality was sincere. Every Thomson manager was given his or her marching orders to improve,” says Bryan Cantley, manager of editorial services at the Canadian Daily Newspaper Association. Eric Anderson, managing editor of the Thomson-owned Advocate of Newark, Ohio, saw the conference as a visible statement that the standards of the past are no longer acceptable. “It’s a considerable switch from the old Thomson attitude in which quality was up to individual publishers and editors,” he says. “If those standards were higher or lower, those papers reflected that, but not anymore.” The most remarkable aspect of the new Thomson push is the financial support that publishers and editors are receiving from head office to clean up their acts. In the old days, spending any money on something as frivolous as improving newspapers was unheard of. The chain’s founder, Roy Thomson, was a self-made success who bought his first newspaper, The Timmins Daily Press, in 1934, with a $200 deposit, and thus launched a publishing empire producing annual revenues of$725 million by the time of his death in 1976. Although he was fond of saying that good journalism sold more papers, he really ran his newspaper business on the principle expressed in another favourite saying: “Editorial is the stuff you separate the ads with.” His penny-pinching policies were legendary. To pare costs, reporters were cut off from receiving free copies of their own newspapers and pencils were tethered to telephones to keep employees from walking off with them. A frustrated publisher is claimed to have once said of Thomson’s miserly upper management: “God help us if they ever realize there are two sides to a piece of toilet paper.”

And those policies continued when son Kenneth took over the company following Roy’s death. By this time, Thomson had acquired 148 papers in North America and Britain, including the prestigious Times of London, which has subsequently been sold. (Today, Kenneth Thomson, the chairman of Thomson Corporation, is the eighth-richest man in the world, according to Forbes magazine.)

Ironically, it is precisely the corporate attitude established under Roy Thomson-that newspaper content is irrelevant, or at best, secondary to advertising-that has damaged the franchise and hurt circulation in recent years. Thomson head office has historically pushed for 25 to 30 percent profit margins, which are at least 10 percent higher than the average for North Ametican newspaper chains. With circulation stagnating as various new competitors came on the scene, publishers such as the Mercury’s Stephen Rhodes eventually were finding it harder and harder to produce those returns while also producing enough quality local news coverage to keep readers happy.

Thomson’s new response to the problem has been to accept lower profit margins from publishers (as low as 19 percent, according to one industry analyst’s estimate) and free up money for product improvements. In the short term, it means the ratio of news to ad pages has increased across the board at Thomson, even as the recession continues to decrease advertising sales. In the long term, it means that individual newspapers will have more flexibility to hire reporters, editors, or other staff to produce good papers. “Since Johnston took over, our newshole is 15 percent larger; I hired two new positions last year and one this year,” says Anderson of the Advocate, “all at a time when the advertising climate is not as exciting as some folks might like it to be.”

Despite such optimism, Thomson’s rebound won’t be easy. During its long corporate sleep, many competitors gained serious ground on it. One such company, Metroland, (owned by The Toronto Star’s parent Torstar Corp.), runs a string of weekly papers across Ontario in direct competition with several Thomson dailies. They pose a significant threat. Circulation at Thomson’s The Oshawa Times, for instance, has dropped 20 percent (to 20,000) since Metroland began publishing its tri-weekly Oshawa/Whitby This Week in 1970, which today has a circulation of 68,000. And since Metroland launched its weekly Peterborough This Week in 1989, circulation at Thomson’s Peterborough Examiner has dropped almost 10 percent. In the most dramatic upset, Thomson quit publishing the 135-year-old Brampton Times in 1989, largely because it couldn’t compete against Metroland’s Brampton Guardian, published three times a week, and the large papers in nearby Toronto.
“Metroland happens to be very good,” admits Johnston. “They are a well-marketed newspaper. But our circulation decline only reflects the general state of what’s happening in the newspaper business.” Johnston believes Thomson is reversing the trend, pointing to the fact that overall circulation of Thomson papers was up by almost two percent in 1991.

The most complex challenge faced by Thomson may be one faced by the whole newspaper industry: to reinvigorate its products to ensure their appeal to the readers of tomorrow. “Newspapers are in danger of being left behind,” says Cantley. “They appear to be losing their readers to television and to so many different forms of communication. Young readers are coming up who really haven’t been brought up on newspapers. They’ve been brought up on television and computers. It could result in a very difficult time for newspapers.”

The general answer is to select news that is more relevant to readers’ lives and to package it in a more exciting way. More and more newspapers are redefining their notions of daily news and using colour, graphics, sidebars and news summaries to retain readers’ attention. During last November’s conference in Tennessee, Thomson employees boned up on contemporary trends by studying the model of the 27 ,000-circulation Boca Raton News, in Florida. Owned by Knight-Ridder, it broke ground in 1989 with its innovative “25/43 Project,” designed to attract new readers within that age group with a “news-you-can-use” format of shorter, softer stories and lots of colour.

Of course, studying is one thing, but implementing radical change is quite another. “Getting newspapers to change is harder than turning around the Queen Mary,” says Cantley. “There are cultures in the newsroom; and journalists are very conservative people whose training is rooted in very old-fashioned ways of reporting with beats.”

At least one old-school thinker believes that Thomson’s experiment with trendy design won’t work unless it’s rooted solidly on a foundation of classic hard-news reporting. “You’re still going to end up with fluff newspapers,” says John McLeod, a Thomson employee for almost 10 years and former managing editor of the Brampton Time.~. “It’s fine to have a paper that’s more attractive to look at, but once people get past the looks, there has to be something to keep them there. Redesigns don’t work unless there’s some substance behind the redesign and that’s where Thomson has yet to prove itself-that it can put substance into its newspapers.”

McLeod should know. He literally wrote the book on the “Thomson Formula.” It’s an editorial mix of what McLeod calls “the cook of the week, the team of the day and lots of fluffy little features while ignoring the hard news in the community” all prescribed in a manual he put together to train editorial employees. In 1983, when McLeod decided to ignore his own manual to concentrate on publishing stories linking local politicians with big developers, he ran into trouble from his publisher and head office. Eventually, he was ordered by head office to reassign the reporter, who was getting the developer scoops, to soft features; he refused and was fired.

From his experience, McLeod is convinced that puff pieces don’t sell papers in competitive markets. Unless Thomson papers begin to emphasize hard news, he concludes, they’ll never gain ground on their competition.
Thomson’s Hunter George dismisses McLeod’s characterization of his papers as too fluffy. “You’d be hard-pressed to say that a community newspaper that goes into 80 to 85 percent of homes in the community, and that people pay money for, would fit that description,” he argues. And he defends the new era of news that’s truly relevant to readers’ day to day concerns. “If I want to know whether it’s better to use disposable or non-disposable diapers, I would say that’s information I’d like to have and I’d like my newspaper to give it to me. If somebody were to say that’s soft news, I’d say bull.”

A final element of Thomson’s corporate renewal is a massive decentralization of newspaper operations. Under Johnston’s rule, Thomson’s head office no longer dictates plans for development. Instead, changes originate with individual publishers. In theory, this gives publishers greater liberty to produce a paper that’s sensitive to community needs.

In reality, just how much liberty publishers actually have is questionable at times. For redesigns at the Mercury and the Advocate, head office reinforced rigid deadlines. While the Mercury’s progress was interrupted by a bitter strike, the Advocate did meet its deadline-even though its own staffers felt they hadn’t really completed their redesign work. “Improvements had to be accomplished,” says Johnston firmly. “It was not going to be on someone else’s time frame. We’ve said consistently that if somebody doesn’t want to operate within our philosophy, they’re going to have a difficult time staying employed, aren’t they?”
In his office at Thomson headquarters, Tony Sutton is putting the finishing touches on the last of three new prototypes he has designed for the Mercury. Moving the computer mouse, he brings up the prototypes on the 18-inch Mac screen, which takes up most of the room on his desk. When redesigning a newspaper, he comments, “you’re going in and saying to people ‘what you’ve done is wrong.’ You’re rejecting what somebody spent a huge amount of time doing. So you have to be sympathetic. You have to explain how to do the job properly. But the first thing you do is show them at least one page where you’ve done the job properly because you’re setting your credentials and showing an alternative which is usually better.”

It’s an understatement to call what Sutton has done “better.” Large bold headlines are splashed across the top of the page; the text is larger, cleaner and easier to read; the stories are shorter. The Daily Mercury is actually appealing.

While the redesigns don’t guarantee Thomson a victory in the newspaper wars of the nineties, they’re at least a symbol of a new fighting spirit. Sutton, who worked for the company 20 years ago in England, knows the battle will be long and hard. “Thomson is realizing they have to do something better,” he says. “The problem is you don’t change 50 years of thinking overnight.”