Tuesday, December 09, 2003

Checkmate: White Knight to Rescue Lord Black: The Canadian Media Invasion Begins

Will Mort Zuckerman be the white knight to rescue Lord Black and the embattled Hollinger, Inc, and, more important, will the media ever stop preceding Hollinger with embattled? That cannot be good for the share price.

Oh, it's all good, The Corsair is only having a little bit of shadenfreude at the expense of the mogul Canadians. And you can bet your black clothing that somewhere,--somehow -- Graydon Carter is lighting up, secretly avoiding the Blooberg's finest and chuckling at the end of irony and this curious media development.

Chris Tryhorn of the Guardian writes:

"Mr.Zuckerman, who owns the Daily News tabloid is the latest high-profile figure to be touted as a potential white knight who might rescue Lord Black's companies.

"According to reports, Lord Black is hoping to persuade him to invest in Hollinger and is not in talks to sell any of his titles, which include the Daily Telegraph, the Spectator magazine and the Jerusaleum Post.

"Mr Zuckerman, like Lord Black, was born in Canada and made his fortune in Boston real estate and has owned the market-leading Daily News for the past decade."

In Richard Sikios' 1995 book Shades of Black he tells a compelling story of how Mort Zuckerman beat out Lord Conrad Black to buy the NY Daily News. Black eventually went on to back the New York Sun.

Lord Black of Crossharbour was always a fan of the New York scene and was after an American flagship. In 1992 he met Barbara Walters at a cocktail party in London. Walters suggested to Lord Black (okay, I just like saying that) that he talk to her investment banker friend John Veronis about buying the troubled Daily News. Lord Black did and things started rolling.

He assessed that the Daily News was overmanned and needed a new printing plant, but, as a businessman, approached it all from the point of view of getting a "a good deal or no deal." Enter Mortimer Zuckerman, an individual not tied to any company or justifications for his purchases.

Zuckerman made his wealth in real estate and wanted "face" in the New Yorkmedia swirl after buying US News and World Report and The Atlantic. Black and Zuckerman initially talked about buying the venture together. David Radler. president of Hollinger, Black's company, told Siklos:

"At one point (Zuckerman) talked, for instance, that we would switch every year who would control the editorial page."

Conversations broke down and a bidding war ensued. Rupert Murdoch weighed in, unsurprisingly, on the side of fellow conservative Lord Black. "I think Conrad would be very good for the News," said Murdoch at the time,"and he'd be better still for the city."

On August 17 Lord Black offered $75 million of Hollinger money and won backing of both the Board of Directors and management of the Daily News. Zuckerman won the drivers and pressmens unions. In the end Zuckerman won because he offered a more positive vision for the company as an individual buyer not linked to a corporation. Lord Black would have had to cut jobs to justify the purchase to investors in Hollinger. C'est tout!

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