Maclean Hunter Publishing Limited

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Maclean Hunter Publishing Limited

777 Bay Street
Toronto, Ontario M5W 1A7
Canada
(416) 596-5000
(800) 268-9199
Fax: (416) 596-5526

Wholly Owned Subsidiary of Rogers Communications Inc.
Incorporated: 1891 as J.B. McLean Publishing Company, Ltd.
Employees: 800
Sales: C$235.7 million (1997)
SICs: 2721 Periodicals: Publishing, or Publishing &
Printing; 4899 Communication Services, Not
Elsewhere Classified

Maclean Hunter Publishing Limited is a leading publisher of Canadian consumer magazines and business publications. It is perhaps best known as the producer of Maclean’s, Canada’s English-language weekly news magazine, with a readership of 2.3 million. Other consumer magazines include L’actualité, Canada’s French-language current affairs magazine; women-oriented Chatelaine (English language), Châtelaine (French), Flare, and Modern Woman; Ontario Out of Doors; and, through Today’s Parent Group, several parenting magazines, including Today’s Parent and Great Expectations. Maclean Hunter publishes more than 40 specialized business periodicals, newsletters, and directories, including Canadian Grocer, The Medical Post, Canadian Printer, and Marketing. The company also holds a 60 percent stake in Canadian Business Media Ltd., whose publications include Canadian Business, the country’s number one business magazine. Maclean Hunter also owns MH Media Monitoring Limited, the leading media tracking source in Canada; and Canadian Ad-Check Services Inc., which specializes in co-op advertising administration, audit, reporting, and retailer payment services.

Maclean Hunter was founded in the late 19th century as a publisher of trade publications, and over the succeeding decades grew into a Canadian communications giant with operations in North America and Europe and with interests in broadcasting, cable television, and various other communication services, generating revenue of C$1.74 billion in 1993. In April 1994 Rogers Communications Inc. purchased the company, then known as Maclean Hunter Limited, for more than C$3 billion—the largest acquisition in Canadian telecommunications history. Rogers sold some of the Maclean operations, merged others into various Rogers units, and created Maclean Hunter Publishing Limited as its periodical publishing subsidiary.

Canadian Grocer Launched in 1887

Maclean Hunter began in 1887, when John Bayne Maclean left his post on the Toronto Mail to found Grocer Publishing Co. and 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 $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.

Success in the grocery area 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 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 $50,000.

Expanded into General Interest Publications in Early 20th Century

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.” Maclean edited it personally 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 regiment during the Boer War 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 title of Busy Man’s Magazine 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, eliminating 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 percent of the company to Hunter, now a vice-president, for $50,000, and another ten percent 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 soon gained a loyal following.

Survived Great Depression and World War II Shortages

In 1930 the company moved into French-language publishing for Canadians when Maclean purchased Le Prix Courant. During this period, 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 ten-percent 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 May-fair, 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.

Company Perspectives:

In an increasingly data-filled, knowledge-based economy, Maclean Hunter Publishing Limited is meeting the challenge of delivering the right information to the right people. The expertise behind each of our consumer and business magazines is the foundation for reliable information products and services that reach well-defined audiences.

We keep Canadians informed, in all the right places.

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 $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 percent 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 percent 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.

Diversified in the 1960s

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 percent 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, later 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 percent 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, Châtelaine-La Revue Moderne, and following with Le Magazine Maclean in 1961, its English-language consumer magazines lost $1.8 million in that same year. This was, as ever, due partly 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 —was abolished. 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 percent of the shares was arranged. Of the 15 percent, 40 percent was allotted to meet high employee demand.

The company expanded further into nonpublishing 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.

Entered Cable TV in 1967

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, provider of personal pagers to relay messages. In 1973 Maclean-Hunter purchased a 50 percent 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 Cable-vision 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 ten franchises to 43.

In 1975 Hunco Ltd., the Hunter family holding firm, owned a 51 percent 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 four 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.

Bill C-58 (1976) Revitalized Maclean’s

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 nonforeign, 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 Mére 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.

Moved into Newspaper Publishing in 1982

In 1982 the company fulfilled a longstanding ambition to include the newspaper business in its ever-widening scope of operations when it purchased a 51 percent share of the Toronto Sun, a daily tabloid newspaper. 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 percent-owned Barden Cablevision, which covered 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.

In December 1988 Maclean Hunter made the largest acquisition in its history, taking over Selkirk Communications Ltd., a Toronto-based broadcasting and cable company, for an estimated $600 million. It subsequently negotiated deals worth a total of $310 million to sell off large segments of the target company to three other companies, including its rival, Rogers Communications. Although the Canadian Radio-Television and Telecommunications Commission approved the deal the following year, it ordered Maclean Hunter to invest $21.2 million—the size of the financial gain the company stood to make on the purchase and breakup—in a capital fund to be used to strengthen and improve Canadian broadcasting.

As Maclean Hunter entered the new decade, a recessionary economy and a concomitant decline in ad revenues resulted in lower profits. Likewise, the company’s stock earnings plummeted to 14 cents per share, a 75 percent drop. According to some analysts, the company’s move towards product diversity also contributed to the decline. The cost of the Selkirk acquisition, for instance, while strengthening the company’s presence in the broadcasting and cable television markets, offset revenue growths from other segments of the company.

Acquired by Rogers in 1994

Maclean Hunter itself became the object of an acquisition in early 1994. Hoping to create a C$3 billion communications conglomerate that would serve a third of Canada’s 7.2 million cable subscribers and provide a Canadian analog to U.S. communications giants Time Warner and McGraw-Hill, Rogers looked to purchase all of Maclean Hunter’s shares, which were valued at C$3.2 million. The magnitude of the possible merger and the repercussions in the communications world provoked a variety of responses. Rogers’ aggressive chief and founder Ted Rogers expressed the belief held by many that the new conglomerate would help Canada as a whole by securing its place on the information highway and, in the short term, consolidating the country’s cable-TV industry and enhancing customer service. Others, however, feared the ramifications such a merger would present for the Canadian populace. Ian Morrison, president of Friends of Canadian Broadcasting, for instance, suggested that the competitive advantage gained by Rogers would hinder the free flow of information and raise prices in the Canadian entertainment industry. “When does a monopoly ever reduce the cost to the consumer?” he told the Globe and Mail’s Harvey Enchin and John Partridge.

In an attempt to prevent the hostile takeover, Maclean Hunter chose not to adopt a common strategy known as a “poison pill”, in which a targeted company sells its assets and loads itself with debt. Rather, after Rogers made an offer of $17 per share, Maclean Hunter chief executive officer Ronald Osborne attempted to obtain more money for shareholders by breaking up the company and selling the individual pieces at a higher rate. But no one could top Rogers’ offer. After a month of heated rhetoric between the two companies, Rogers amended his offer, agreeing to pay a special dividend of 50 cents a share, raising the value of the deal by C$90 million. On March 9, negotiations were finally completed, with the C$3.07 billion acquisition consummated in April; eight months later the takeover was approved by the federal broadcast regulator.

Reborn As Maclean Hunter Publishing

After taking full control of the communications giant, Rogers elected to sell—in 1994 and 1995—Maclean Hunter’s U.S. cable-television assets, several radio stations, magazines in the United States and Europe, and some printing operations. To gain regulatory approval, Rogers also had to divest CFCN-TV; it sold the station to Shaw Communications Inc. in September 1995. Maclean Hunter’s Canadian cable-television systems were integrated into Rogers Cablesystems Limited. Maclean’s paging operations were subsumed by Rogers Cantel Mobile Communications Inc., an 81 percent-owned unit of Rogers Communications. In 1996 Rogers sold off several additional operations acquired with Maclean Hunter, including printers Davis & Henderson and Transkrit and the 62 percent interest in Toronto Sun Publishing Corporation (which therein included a 60.2 percent stake in the Financial Post).

Rogers set up a new subsidiary, Rogers Multi-Media Inc. (soon renamed Rogers Media Inc.), which included the remaining Maclean Hunter assets and which consisted of two units. Rogers Broadcasting Limited included four Maclean radio stations (in addition to Rogers’ several other radio stations, television stations, and other broadcasting interests). Maclean Hunter, in a roots-returning maneuver, was reborn as Maclean Hunter Publishing Limited, producer of several consumer magazines and more than 35 business publications. Revenue for the new Maclean Hunter was C$203.7 million in 1995, the company’s first full year as a Rogers subsidiary.

By 1997 revenue had increased to C$235.7 million. Part of the increase was attributable to acquisitions. In February 1997 Maclean Hunter paid C$8.3 million for seven professional periodicals in healthcare, including Family Practice and Patient Care. During 1998 Maclean Hunter gained full control of Today’s Parent Group, producer of the national parenting magazine Today’s Parent, as well as New Mother and its French-language counterpart, Mère Nouvelle. Soon added to this group of parenting magazines was Today’s Grandparent, which was launched in January 1999 and was aimed at Canadians between 50 and 70 with grandchildren under the age of 13. Maclean Hunter also launched two other new periodicals in 1998: Advisor’s Edge, which debuted in June and targeted financial planners, and Corporate Travel Management, which premiered in November and was aimed at managers responsible for company travel policy.

Principal Subsidiaries

Canadian Ad-Check Services Inc.; MH Media Monitoring Limited; Toronto Life Publishing Co. Ltd.; Canadian Business Media Ltd. (60%); Today’s Parent Group.