Maclean Hunter Limited

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Maclean Hunter Limited

Maclean Hunter Building
777 Bay Street
Toronto, Ontario M5W 1A7
Canada
(416) 596-5000
Fax: (416) 593-3175

Public Company
Incorporated: 1891 as J.B. McLean Publishing Company, Ltd.
Employees: 12,425
Sales: C$1.54 billion (US$1.33 billion)
Stock Exchanges: Toronto Montreal

Maclean Hunter Limited is a Canadian communications giant with operations in North America and Europe. The company began as a trade-magazine publisher, and that has remained its traditional mainstay. The company at first engaged almost exclusively in publishing and printing, and was closely held and run by a few men. Since 1961, however, Maclean Hunter has broadened its base of operations to encompass a wide variety of communications fields, becoming an important voice in Canadian public life.

Maclean Hunter began in 1887, when John Bayne Maclean left his post on the Toronto Mail to found Grocer Publishing Co., to publish The Canadian Grocer, a specialized publication filled with commercial news about the food industry. The first 16-page issue was sent free to grocers all over Canada, who were invited to purchase subscriptions for C$2 a year. Within three months, the fledgling publication became profitable and Maclean began to publish weekly. At that time, he also brought his brother, Hugh, into the business as a partner. Expansion followed in 1888 with the establishment of Dry Goods Review.

Maclean’s goal in publishing was to provide “a specialized news services to our subscribers,” as he stated. Success in the grocery publishing business led Maclean to move into other trades, and in 1888, Hardware & Metal was established at the invitation of a group of hardware-store owners. By 1890, Maclean was publishing four business journals, and had set up his own typesetting and composition operations in an effort to maintain control over the costs of magazine production. In 1891, the J.B. McLean Publishing Company, Ltd. was incorporated. Maclean was not always consistent in spelling his own last name.

By 1893, Hugh Maclean was running the business in Toronto, while his brother J.B. worked in New York City on a short-lived art publication called Art Weekly. In the early 1890s, the company began to open advertising sales offices in cities outside Toronto, branching out to Montreal in 1890, and across the Atlantic Ocean to London in 1895. In 1899, John Maclean bought out his brother’s one-third share in their company for C$50,000.

By 1903, J.B. McLean Publishing Company had grown to employ about 50 people. Two years later, the company was successfully publishing six business papers, including Bookseller and Stationer, Printer and Publisher, and Canadian Machinery & Manufacturing News, and its founder was anxious to make his mark in a wider field. Using the profits from his commercial journals, he purchased a magazine published by an advertising agency, called Business: the Business Man’s Magazine. Shortening its name to The Business Magazine, Maclean published his first issue in October 1905. The 144-page general-interest publication was made up entirely of condensed articles from other publications. Three months later, the magazine’s name was again changed, this time to Busy Man’s Magazine, with a subtitle that explained its purpose: “The Cream of the World’s Magazines Reproduced for Busy People.” It continued to hold the interest of its founder, who edited it personally, with some assistance in acquiring original articles, while also overseeing the company’s other publications.

At the start of 1907, the J.B. Maclean Publishing Company introduced another general-interest publication, the Financial Post. The weekly was a joint venture between Maclean and Stewart Houston, a well-connected lawyer who wrote and edited the newspaper, which started out with 25,000 copies.

In the first decade of the 20th century, Maclean’s publishing enterprise grew quickly. Under the autocratic and frugal leadership of its founder, who became known as “the Colonel” after he was given command of a Canadian regiment in 1899, the company had a high turnover of employees, frustrated by low salaries and the Colonel’s constant meddling. In 1911, however, Maclean promoted the man whose name would one day join his in the corporate logo, Horace T. Hunter, to general manager. Hunter raised salaries and brought a decentralized approach to management, improving the company atmosphere and employee productivity. Also in 1911, Maclean changed the Busy Man’s Magazine’s title to Maclean ’s. He continued to act as chief editor for the flagship publication.

Not long after the end of World War I, in August 1919, Maclean’s only son died unexpectedly, foreclosing the possibility that his company would become a dynasty. Also that year, Maclean renamed the enterprise the Maclean Publishing Company Limited. Soon afterward, in 1920, Maclean sold 30% of the company to his vice president, Hunter, for C$50,000, and another 10% of the stock to his general manager, H. Victor Tyrrell. Other editors and executives were also given the opportunity to buy company stock. At the same time, Maclean undertook a long-overdue company restructuring and bought the one-third of the Financial Post that the company did not already control.

In the years following World War I, the Canadian consumer-magazine industry was overwhelmed by an influx of magazines produced in the United States that paid no import duties to enter the country. Nevertheless, throughout the 1920s, Maclean’s enterprise continued to grow. In 1922, the company officially branched out from publishing into the related field of commercial printing, an activity that actually had been going on for some time. In 1909, the company had purchased an entire square block of property in Toronto to provide enough space for a printing plant for all its magazines, and over the years, the plant had begun to take on outside work. In 1927, the company first ventured outside Canada with its acquisition of Inland Printer and Rock Products in the United States, and in the following year it introduced The Chatelaine—later simply Chatelaine—a women’s magazine that won its name in a contest and soon gained a loyal following.

In 1930, the company moved into French-language publishing for Canadians when Maclean purchased Le Prix Courant. The economic climate during the 1930s was difficult, and Maclean’s company felt the impact of the Great Depression. Helped by a government duty on imported magazines, which allowed Canadian publishers to regain some of the market share they had lost to U.S. publishers, Maclean was able to avoid laying off employees by putting workers paid by the hour on shortened schedules, and cutting wages and vacation pay. Maclean Publishing Company’s salaried employees suffered two 10% cuts in pay. In 1935, the import duties were lifted with a change in Canada’s government, and U.S. publications gained predominance once more on newsstands. By 1936, however, Maclean’s employees numbered nearly 900, and wages and hours had both increased. By the end of the decade, the company boasted 30 publications.

With the coming of World War II, Maclean coped with wartime rationing and shortages of goods and workers, and a drastic decline in advertising revenue. With the conversion of the economy to a wartime footing, production of consumer goods was drastically curtailed, resulting in a scarcity or disappearance of many goods, and the need for consumer product advertising thus dried up. The company attempted to compensate by encouraging “sustaining” advertising, to maintain the image and familiarity of a brand name, and through the increased use of advertising by the government. The company’s business publications became tools in the war effort, monitoring the nationwide war production effort, and publicizing government policies and regulations. Even such publications as Mayfair, a society magazine, were transformed, advising women on war charities and economical use of food. In addition, the company produced a free edition of Maclean’s for distribution to Canadians on active duty overseas, which eventually gained a circulation of 30,000.

In 1945, the company’s name was changed to Maclean-Hunter Publishing Company to reflect the contribution of Horace T. Hunter, its president since 1933. Three years later, the company made its most dramatic physical expansion up to that point, when it opened a C$3 million printing plant in a Toronto suburb, Willowdale. Throughout the postwar years, the company once again found its consumer publications facing stiff competition for advertising dollars from such U.S. imports as the Canadian editions of Time and Reader’s Digest. By 1948, two-thirds of all magazines purchased in Canada came from other countries.

In 1950 John Maclean died, and Hunter acquired 60% control of the company, in which he continued to serve as president for two more years. In 1952, Floyd S. Chalmers, who had been with the company since 1919, became president.

Throughout the 1950s, Canadian magazines found themselves challenged by new modes of communication, such as television, as well as by U.S. publications. In 1956, Canadian publishers got some help from their government when it imposed a 20% tax on advertising in non-Canadian magazines, but this was repealed the following year under U.S. pressure. By the end of the decade, nonetheless, Maclean-Hunter was publishing 51 different titles.

The 1960s marked a turning point for Maclean-Hunter. What had until then been a staid enterprise, engaged almost exclusively in publishing, became a diversified company, operating in a wide variety of communications fields. In 1960, the company made an unsuccessful attempt to obtain a license for a television station in Toronto, but in the following year it was able to enter the broadcasting industry through its purchase of 50% of the radio station CFCO in Chatham, Ontario. The station had been one of the pioneers in Canadian radio, having been founded by a butcher with an interest in radio in 1926. It had used a homemade transmitter until 1948.

Maclean-Hunter also diversified into the event-planning industry. In 1961, the company organized a convention for members of the plastics industry, despite the fact that Canada’s main trade association for plastics was headed by a rival trade publisher, who refused to lend the association’s support to the show. The show, which became an annual event, was not a great success, nor would it be for many years. Nevertheless, Maclean-Hunter forged ahead in the show-management field, forming Industrial & Trade Shows of Canada, now known as Industrial Trade & Consumer Shows Inc., in 1962.

At this time, the company also expanded its holdings in the media-information services field. Maclean-Hunter had long owned Canadian Advertising Rates & Data, a service publication for advertising agencies, and in 1958 it had acquired British Rate & Data. Both were doing well, and the company was looking for new areas of growth. The U.S. market was out of the question, dominated as it was by one well-established firm, Standard Rate & Data Service, so Maclean-Hunter moved into continental Europe with the French publication Tarif Media. In 1961, it sold 50% of this publication to the U.S. company Standard Rate & Data Service, and with this partner formed a European joint venture to launch a West German service, Media Daten. Eventually, European operations came to include Austria, Switzerland, and Italy.

The company’s Canadian operations, however, were not faring as well. Although the company had continued to expand its French-language offerings, adding its first general-interest publication for the Quebec market in 1960, Chatelaine-La Revue Moderne, and following with Le Magazine Maclean in 1961, its English-language consumer magazines lost C$1.8 million in that same year. This was, as ever, due party to the domination of the Canadian market by U.S. publications. Despite this, Maclean-Hunter introduced another English-language consumer publication in 1963, targeted at younger women. It was called Miss Chatelaine.

A year later, in 1965, the Canadian periodical industry received some government support when the tax deduction for the business expense of advertisements in non-Canadian publications—with the exception of Time and Reader’s Digest— wasabolished. This opened up the field somewhat by discouraging the proliferation of U.S.-owned Canadian editions, and driving some of these publications out of business.

Also in 1965, stock in Maclean-Hunter was publicly traded for the first time. Up until this time, the company’s shares had been closely held by Maclean’s designated successors and a small number of members of senior management, but it became clear that internal mechanisms for distributing stock in the company were no longer adequate, and a sale of 15% of the shares was arranged. Of the 15%, 40% was allotted to meet high employee demand.

The company expanded further into non-publishing fields in the mid-1960s, acquiring Design Craft Ltd., which produced exhibits for trade shows, as a natural complement to its existing interests in that area. It continued to purchase radio stations, adding CHYM, a rural station, in 1964, and CKEY of Toronto, the company’s first urban radio property, in 1965. Also in 1965, the broadcasting company’s interests were augmented by the acquisition of CFCN radio and television, of Calgary.

Further ventures into the broadcasting field came in 1967 with Maclean-Hunter’s entry into the cable television business. The company entered a partnership with Frederick T. Metcalf, who had already built a cable system in Guelph, Ontario, and the result was Maclean Hunter Cable TV. The first market targeted for expansion was Toronto. The company’s steady progress in diversification was ratified in 1968 when its name was updated from Maclean-Hunter Publishing Company Limited to Maclean-Hunter Limited.

In the first years of the 1970s, the company ventured into book distribution, purchasing a book wholesaler; into the printing of business forms, with the acquisition of Data Business Forms; and into the paging business, by buying Airtel, which provides personal pagers to relay messages. In 1973, Maclean-Hunter purchased a 50% interest in KEG Productions Ltd., which put together television programs on wildlife. The company created “Audubon Wildlife Theater” and “Profiles of Nature,” both successful and long-running series.

In the mid-1970s, with further expansion in the Canadian market blocked by the Canadian Radio-television & Telecommunications Commission, Maclean-Hunter set its sights on cable television in the United States, buying Suburban Cablevision, of New Jersey. Unlike Canadian cable systems, which existed to provide clear reception of ordinary network television in remote locations, the New Jersey operations set out to attract customers by offering them access to programs not available on regular television, such as special sporting events. This new concept proved popular, and Suburban Cablevision grew from 10 franchises to 43.

In 1975 Hunco Ltd., the Hunter family holding firm, owned a 51% controlling interest in Maclean-Hunter. This block of stock was sold to the board of Maclean-Hunter in January 1976, when chairman Donald F. Hunter, facing death from a brain tumor, sold nearly 3.5 million of his family’s 4 million shares to a holding company set up to ensure that the company would be safe from unwanted takeover attempts in his absence. The era of family control was over.

Perhaps the most important event of the mid-1970s for Maclean-Hunter took place outside the company: the passage of bill C-58 in 1976. This amendment to the Income Tax Act removed the exemptions on tax-deductible advertising from Time and Reader’s Digest, and stipulated that three-quarters of a publication’s owners must be Canadian and four-fifths of its contents must be original and non-foreign, in order for advertising within it to qualify for a tax exemption. This gave new life to the Canadian magazine industry, in particular Maclean ’s. The flagship publication had long suffered in its head-to-head battle with Time, and in addition had fallen into an identity crisis under a series of editors. The magazine, which had lost credibility and had been losing money heavily since the early 1960s, had become a source of embarrassment to all concerned. With the support of bill C-58, however, Maclean’s was able to rally in the latter part of the 1970s, and in 1978 stepped up from a biweekly to weekly publication.

By that time, Maclean-Hunter had diversified to such a large extent that income from publishing accounted for only half of all company revenues. Notwithstanding these changes, the company continued to expand its magazine operations in the late 1970s, acquiring four special-interest publications in 1978, including Ski Canada and Racquets Canada, and founding New Mother and its French-language counterpart Mere Nouvelle in 1979.

Steady expansion of Maclean-Hunter operations continued into the 1980s, with the purchase of a four-fifths interest in a U.S. form printer, Transkrit Corporation, in 1980; the acquisition of Progressive Grocer journal in 1982; the launch of City & Country Home in 1982; and the purchase of Hospital Practice in 1983. In 1981 Maclean-Hunter Limited dropped the hyphen in its name becoming Maclean Hunter Limited.

In 1982, the company fulfilled a long-standing ambition to include the newspaper business in its ever-widening scope of operations when it purchased a 51 % share of the Toronto Sun, a daily tabloid newspaper sold primarily to commuters. A year later its involvement with the Sun led to purchase of the Houston Post, in Texas.

Throughout the late 1980s, Maclean Hunter continued to grow in its chosen fields, primarily through acquisitions, as in its purchase of the Yorkville Group in 1985 and Davis & Henderson Ltd. in 1986, both printers. In 1986, it started work on 49%-owned Barden Cablevision, which covers all of Detroit, Michigan, and subsequently began construction of a system in the United Kingdom. By 1989, newspaper holdings included Sun papers in three Canadian cities outside Toronto, and in 1990 the company purchased Armstrong Communications, a cable system, in Ontario.

From its start, Maclean Hunter has relied on strong management in solid fields, such as business publishing, to fuel steady growth. Backed by a tradition of success, it appears likely that Maclean Hunter will continue to prosper.