The decline of Black Press: How an Ohio newspaper sank a BC publishing empire
This is how a quest to turn a small-town newspaper empire into a continental behemoth backfired.
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This is how a quest to turn a small-town newspaper empire into a continental behemoth backfired.
This story was first published by Tyler Olsen, managing editor of the Fraser Valley Current, a publication in the Overstory network. Support their work and award-winning local journalism by becoming a member, or subscribing to their daily newsletter.
In 2006, Black Press was BC’s largest publisher of community newspapers. It owned a daily in Alberta. And I was just starting my newspaper career with one of the company’s papers. As I learned how to write a story and take a photo, Black Press owner David Black was doing what made him rich: he was looking to buy another newspaper.
But driven by ambition, this one would be bigger than any he had bought before. But Black’s big bet would end up going sour in ways that are only now becoming clear—and which will influence the future of community institutions in the Fraser Valley and beyond for years to come.
This is how a quest to turn a small-town newspaper empire into a continental behemoth backfired, and how the fate of Black Press was determined not in Williams Lake or Abbotsford, but in a gritty industrial Ohioan town.
A full declaration of my conflict of interests for this story would be the story of much of my adult life. So we’ll keep this as brief as possible. My first work experience week in high school was at the Black Press-owned newspaper in my hometown of Vernon, BC. My first post-university newspaper job was at the same paper. I returned to Black Press in 2014, when it acquired the second paper I worked at: the Chilliwack Times. The company then transferred me to work at the Abbotsford News, another of its titles. I wasn’t enthusiastic about that move, I was less happy when the company closed down the Times, and I was heartbroken when personal tragedy struck former co-workers pushed out of jobs. I left Black Press unhappy with the company’s direction. Today, I operate an ostensible competitor to Black Press, though we actually rely on its reporters’ local news-gathering operations to help inform our readers through our Need To Know section. I consider many people still employed by the company to be friends and want them to stay employed. I love newspapers.
But somebody should write in depth about what led a BC paper chain with continental ambitions to end up filing for creditor protection this week. And if history is any indication, it’s possible nobody will. So here’s what happened. All the facts here are either a matter of public record and broadly known or come directly from personal observation.
Black Press’s current troubles are, broadly, not caused by how Black Press ran its newspapers in Chilliwack and Langley and Abbotsford and dozens of other small and medium-sized communities across British Columbia. This is not a story about how the things that annoyed or angered me or others came back to force Black Press into the humiliation of creditor protection. It’s not, really, about anything I or other reporters saw or experienced or loved or hated about the company.
That’s all small-town stuff. And if Black Press had remained a small-town company that simply owned dozens of small newspapers across the province, it wouldn’t be in the position it is in today.
Instead, this is a story about ambition and a desire to be better and bigger than BC’s dominant community newspaper chain. This is a story about how a good business strategy can become a bad business strategy in the matter of a few years. And this is a story about Akron, Ohio.
But before we get to the $100 million bet that went wrong, we should go back to the start. To one man’s journey from Toronto to Williams Lake.
David Black would build a fortune out of small-town businesses, but he was never a small-town guy himself. Black grew up in Vancouver and Toronto the son of an advertising executive. He went to university where he studied engineering and business and, as the 1970s dawned, went to work in downtown Toronto. He started at an insurance company, before moving to the acquisitions department of Torstar, the parent company of the Toronto Star, the country’s largest newspaper.
Black helped buy newspapers for the Star and started to wonder if he shouldn’t buy one for himself. So in the mid-1970s, he struck out on his own. Kind of.
“We looked at a lot of things but I liked small business,” he told the Financial Post in 2001.
Black bought the Williams Lake Tribune. He wasn’t venturing too far out on a limb—he purchased the paper from his father, a Vancouver ad executive who had bought the paper six years earlier and was looking for someone else to run it.
Black would later say he saw the Tribune as a “stepping stone” and intended to stay for just a couple years. He would stick around Williams Lake for a decade, but his ambitious intentions remained. He started to act on them when the owners of a newspaper in Ashcroft, 150km to the south, put their business up for sale. Black bought it and saw what he had learned at business school and in Toronto confirmed: while you could make OK money running one paper—small-town newspapers had low labour costs and usually little competition—fortunes could be made by those who owned multiple news outlets. (This lesson would come back to haunt his company.)
“We couldn’t really share sales or editorial because they were very local, but we could share all the other costs,” Black told the Tribune in 2018. “Our accountant could do their accounting as well as ours. Our presses could print their papers as well as ours and so on. You were able to take out some of the costs and that’s what made it worthwhile.”
Over the following years, Black would add papers in northern BC to his stable and find more and more efficiencies of scale, along with like-minded publishers, to help build an empire.
Over the coming decades, Black Press would buy papers on Vancouver Island, then in the Shuswap, then in northwestern Washington State. In 1997, the company ballooned when it bought 33 newspapers in Alberta and BC from the UK-based company that owned them. That suite of newspapers included the Chilliwack Progress and Abbotsford News, two papers that were hugely profitable fixtures of their local communities. When it bought the Lower Mainland papers, Black Press bragged that it would be delivering papers and flyers to 92% of BC households each year.
The late 1990s and early 2000s were a glorious era for newspapers, even as the Internet suggested a new era was dawning. Whether in big cities or small, subscription-based or with free distribution, newspapers were hugely profitable. Newspapers sold huge advertisements to multi-national corporations and tiny classified lines to seniors trying to offload their antiques.
Small newspapers in BC’s interior might have struggled to attract corporate clients, but they had a huge supply of cheap labour and paltry competition. With each newspaper it bought, Black Press became more efficient, centralizing the more-expensive administration work while allowing some of the country’s largest advertisers to buy ads in not one but dozens of publications.
The printing of papers was a prime example of how a community newspaper chain could thrive. In Vernon, the local paper would pump out three huge editions a week, with printing taking place overnight on Saturday, Tuesday, and Thursday. But the presses wouldn’t sit silent on the other days. Instead, they served the company’s other newspapers in the region. Competitors would even pay to have their own papers printed.
When I worked in Vernon, I could walk into my editor’s office, look through the window and watch as a massive press churned out copies of the Advertiser, an independently owned competitor that focused its coverage solely on Armstrong. As the Morning Star’s Armstrong reporter, I could venture down and see what my Advertiser colleague had written before his stories ever hit the mailboxes of the paper’s subscribers.
The presses were needed to print massive editions chock full of ads.
“It was like the Brinks truck dropped off the ad and classified money every week,” former Abbotsford News editor Rick Rake told me. I’ve heard the nostalgia plenty over the last decade.
Between the ads in Black Press’s newspapers, editors crammed stories and photographs (of sometimes varying quality) produced by large teams of reporters. In Vernon, we had 11 journalists when I joined. The Abbotsford News had a similar number.
Black Press’s formula for newspaper success involved building such efficiencies of scale, and keeping a close eye on costs—especially labour costs. The formula worked, and the company saw its investments continuously bearing fruit. So Black kept expanding the company’s scope and reach. By 2002, Torstar would buy one-fifth of the company for about $20 million. That valued Black Press at around $100 million. Annual revenue was more than double that.
But although the privately-owned company didn’t have a publicly listed corporation’s need to constantly seek higher profits, Black had a personal ambition for more. And ironically, it was a $10 purchase that may have set the ball rolling toward its current state of finances.
In the late 1990s, a single company owned two newspapers in Honolulu, Hawaii. The papers had been jointly owned for decades and operated under a rare arrangement that allowed them to share some resources, while maintaining separate and competing advertising and editorial departments. The quirky arrangement was necessary to appease American anti-trust regulators who could otherwise complain that the newspaper company was operating a monopoly and should be split up.
In 1999, the parent company of the two papers sought to close the less-profitable of the publications, the Honolulu Star-Bulletin. The move would have left the other paper, the Honolulu Advertiser, with a virtual monopoly over the major news business in the city. The proposal triggered a lawsuit from the state that forced the papers’ owner to attempt to sell the Star-Bulletin, instead of closing it down.
Although 2001 was a great time to own a city’s dominant newspaper, the Star-Bulletin wasn’t Honolulu’s top paper. The Star-Bulletin had a long history, but had stiff competition in Hawaii and wasn’t making money. Which is why Black Press was able to buy it for just $10 (or $1, depending on your source).
The purchase was big news on both sides of the border. Most coverage had to carefully point out that David Black was not related to Conrad Black, the infamous newspaper baron who had recently started the National Post and been named a British baron. A long story in the Financial Post (Conrad’s publication), charted David Black’s rise and interviewed him in depth.
The story hailed Black for “saving what is perceived to be an American institution” and successfully bringing real competition to the Honolulu newspaper sector. It also hinted at the difficult competition that might be to come.
The Advertiser was by far the dominant paper in the city and was run by the world’s largest and most-profitable newspaper chain, Gannet. And an analyst told the Post “I don’t think it’s a question of can Black really win… Winning for him is just going to be able to stay in business and run that thing on a profitable basis somewhere at a lower level than the Advertiser.”
The analyst said only the very largest cities could support two major papers—and Honolulu wasn’t one of those big cities.
Looking back, more than two decades later, the irony is that Black Press did win Hawaii’s newspaper war. But the pursuit of major-paper domination would lead it to make a calamitous decision.
First, though, a detour to a fire in Kelowna.
On Aug. 16, 2003, amid what was then already one of BC’s worst wildfire seasons, lightning struck a kindling-dry patch of ground in Okanagan Mountain Provincial Park, south of Kelowna.
Fed by wind from the south, the fire took hold in the dry, rounded, rocky outcrops of Okanagan Mountain, just south of town. In a couple of days, it crept toward the southern suburbs of Kelowna. On the opposite side of Okanagan Lake, residents crowded beaches to watch the fire burn toward the city.
On the evening of Aug. 22, the fire’s march towards Kelowna became a sprint.
Across the Okanagan, tens of thousands of people, including me, turned on their televisions and radios to hear news crews urge tens of thousands of residents to flee their homes.
The city had a daily newspaper, along with a Black Press-owned publication that printed three days a week. But print-based newspapers, which needed to be printed and delivered, could never compete with radio and TV news in such an environment and didn’t usually try. Instead, they focused on delivering photos and more-comprehensive stories a day or two after the event in question.
But in 2003, Kelowna residents got a new look at the future of print-based breaking news through a new media endeavour called Castanet.
Castanet was a media website affiliated, at the time, with a local soft-rock radio station. Having started three years prior, in 2003 Castanet didn’t have a dozen reporters (unlike the newspapers of the day) and didn’t publish anything particularly in-depth or of tremendous quality. It just had a website, on which it published small, radio-sized bites of news. It was even formatted like an online newspaper.
As the Okanagan Mountain fire raced toward town, Castanet created a special low-bandwidth “Firewatch” page where it posted breaking updates for readers. The site gave internet users a place where they could find printed, breaking news not from yesterday, but from 10 minutes ago.
Where was the fire now? Castanet could tell you. Newspapers couldn’t.
The two newspapers in town focused on what they knew: collecting information and photos and writing stories for their audiences to read in the days to come. By the time the Okanagan Mountain fire burned itself out and cemented itself as the most damaging wildfire to that date in Canadian history, Castanet had cemented itself in many readers’ minds as a key source of breaking news in the Kelowna area. And if you looked closely, the emergence of Castanet had far broader implications for the future of a 21st century media company.
Although newspapers were slow to react, over the coming years Castanet would double down on providing breaking news coverage of ongoing events. As it did, it gained a larger and larger audience. In doing so, it demonstrated that there was a huge market for online breaking news delivered as quickly as possible—even if that coverage sometimes provided scant (or erroneous) information.
Newspapers, especially BC’s community-based publications, would take more than a decade to try to follow suit. It wasn’t just that papers were caught off guard, but that they didn’t have the mandate or the resources to do two jobs. Because people hadn’t yet abandoned newspapers. They still offered far more comprehensive and detailed coverage and services. They had classifieds. They had sports. And they had more reporters producing more news than anyone else. Feeding both the web and the print would require more manpower, so the newspapers stuck with what they knew.
Some chains adapted more than others. By the mid-2010s, Black Press was finally holding meetings at which worried executives fretted about the dominance of Castanet and other online competitors in places like Kelowna. Meanwhile, Glacier Media, Black Press’s biggest rival in BC, bought Castanet in 2019 for $22 million. (Castanet has continued to expand in recent years, though it has faced challenges recruiting journalists to match its ambitions.)
Castanet signaled the arrival of a new generation of competitors built specifically for the web. And as audiences turned online, those publications found themselves well-positioned to meet the digital demand—and without the need to pour money and manpower into also publishing a print product every few days.
Three years after the Kelowna fire, in May of 2006, the Internet was still an afterthought at Black Press’s newspapers when I was hired as an intern reporter at the Vernon Morning Star. That didn’t bother me. Nor did I care that the pay was crummy ($1,700/month for an intern; $2,000 for a new reporter when I was hired full-time at the end of the summer). It was a job in a lively, fun, contentious newsroom at a real, honest-to-god newspaper. I would sit at my desk and marvel at the fact that someone was paying me to come up with eye-grabbing sentences about a hedge fire beside a driveway in Spallumcheen.
David Black, though, had his sights set far beyond Williams Lake or Armstrong or Abbotsford or the other communities served by the dozens of newspapers he owned.
After buying the Honolulu paper, Black had indeed found himself in a newspaper war. He had bought the Star-Bulletin after local officials and US courts expressed a desire for competition in the newspaper industry. But speaking to the Progress in 2004, Black seemed to suggest that he had expected the Honolulu Advertiser to gently accept the Star-Bulletin’s competition in the market.
“I thought they would move over and we’d co-exist,” Black said. Instead, he said, a “real war” had sprung up, with the competitor paper launching a free daily product and seeking to obstruct his paper’s access to newsprint. The Star-Bulletin was not thriving. But neither was the Advertiser. The Financial Post reported the two publications had slashed ad rates by as much as 12%. That led Black to tell the Post that the first-year profit of $9 million that he had envisioned wouldn’t materialize. Black Press also planned to invest $25 million to battle the Advertiser.
By 2006, when I was hired, the two newspapers were still operating and fighting one another.
Black Press, and every other newspaper operator in North America, was also confronting a new foe in online classified behemoth Craigslist. The website had launched in 1996 and expanded to Canada in the early 2000’s. Its success revolutionized the try-to-sell-your-stuff world. Suddenly, you could advertise your old couch, apartment for rent, or job opening for free and reach thousands of people in your area. For a century, classified ads—cheap to produce, easy-as-hell to sell, and purchased by both businesses and everyday people—had delivered vast sums of money to newspapers. Thanks to Craigslist (and competitors like Kijiji) those sums had mostly dried up.
Newspapers tried to adapt; Black Press scrambled and bought a Canadian-founded website called UsedEverywhere. But the problem was unfixable: customers and readers had a new way to buy classified ads for free, and they weren’t coming back. Even if a newspaper chain owned their own Craigslist imitator and sold ads to a small portion of advertisers who wanted prominent spots (as Craigslist did), the license to print money had been revoked.
Nevertheless, neither the Honolulu fight nor the Internet-based challenges had soured Black on buying big American newspapers. And although what comes next seems foolhardy given the outcome and what we know now, it’s worth keeping in mind that Black was hardly alone in thinking that buying more newspapers—a strategy that had repeatedly proven to be the path to higher profit margins—was the route to surviving the 21st Century. If your business was built on assembling newspapers, you didn’t stop buying newspapers. The fact that the strategy didn’t seem as flawed then as it did now could be found in the bidding wars that sprung up as ailing newspapers were put up for auction. And in the years to follow, evidence came in the form of bankruptcy and creditor protection filings filed by company after company staffed by supposed newspaper business experts who had all heard the train Internet coming and thought it was coming to pick them up, not run them over.
In 2006, McClatchy, a massive U.S. newspaper chain, paid $4.5 billion to acquire one of its biggest competitors, Knight Ridder. As part of the deal, McClatchy sought to sell two huge Philadelphia newspapers, the Philadelphia Inquirer and Philadelphia Daily News. The circulation of both papers was declining, but news of the sale still kicked off a bidding war. Black thrust himself into the process, but his bid was too low. He was trumped by $515 million of cash from locals who borrowed hundreds of millions of dollars to buy the papers. In 2010, after laying off hundreds of workers, the company that owned the newspapers declared bankruptcy. It had proven unable to claw its way out of the cavernous debt hole created by the paper’s purchase. In 2012, the papers were sold for just $55 million. The Inquirer and Daily News would later change hands again before being donated to a non-profit foundation. What had been a $500 million business was now effectively a charity, with little hope of ever making money. McClatchy, the corporation that sold the Philadelphia papers to buy dozens elsewhere, would itself declare bankruptcy in 2020.
Having unknowingly dodged a bullet, David Black and his company promptly stepped in front of another loaded pistol. Less than two weeks after he failed to buy the Philadelphia papers, Black won a bidding war for the Akron Beacon Journal, another of the papers being sold by McClatchy. Akron, though probably unknown to most BC residents, is about the size of Hamilton and the Beacon Journal was a prestigious paper with a glorious past as the flagship of the massive Knight Ridder chain.
Black bought the paper for $165 million (in American funds). Having lost bids not only for the Philadelphia papers, but also for Boston’s second-biggest publication, Black declared, “I wasn’t going to lose a third time.”
And as the Great Recession approached, unseen, on the horizon, Black spent the next year orchestrating another massive bid for more papers.
In 2007, he offered $400 million to buy 54 newspapers—20 of them dailies—in Ontario and Quebec. Black would eventually be outbid, but in a newspaper story published as the competition for the papers took place, Black was optimistic that he could find a way forward.
“Since the industry has had some of these dislocations caused by technology and so on, it has presented some opportunities,” Black told the CanWest News Service reporter. “All of a sudden there are some papers available for sale that just weren’t before and little guys like myself can have a chance of stepping up and buying something I never would have before.”
Although he had some worries, Black said that “so far it has been the metros that have borne the brunt of the challenge from the Internet. Those are not the papers I could afford anyways.”
Black’s bid for the eastern Canadian papers failed, but he was clearly still bullish on the idea that more newspapers meant more profitable newspapers: that the route to media business success was consolidation. But even as Black bought more papers in Hawaii and Washington over the next decade, the world was increasingly testing not just the notion that bigger chains were better, but that newspapers were a long-term business bet at all.
I left the company and Black Press in 2008 to travel and move to the Lower Mainland. In 2010, I was hired by the Chilliwack Times, a twice-weekly newspaper owned by Postmedia which competed with the larger, Black Press-owned Chilliwack Progress. The Times was sold to Glacier Media—BC’s other community newspaper chain. And in 2014, Glacier and Black Press struck a deal to essentially end newspaper competition in the Lower Mainland.
The two companies swapped papers—Black Press gave up its suburban Vancouver papers in exchange for Glacier’s Fraser Valley titles. Within a couple years, each community only had one paper, and I had been ordered to Abbotsford, to work for the Abbotsford News.
When I arrived in Abbotsford, I walked into a building that had seen bigger and better days. The entire upstairs of the company’s large Sumas Way building was empty, with cuts having shrunk the workforce to the point where two storeys weren’t necessary anymore. The newsroom staff was half what it once was. And the press in the back soon fell silent, with printing operations consolidated off-site.
And yet, the end did not seem particularly near. The papers were still profitable (in part because of the lower costs that come when you lay off a bunch of people). People were still reading the paper in print and online. And there was always a glimmer of hope that newspapers—especially of the community sort—could find a 21st Century equilibrium.
In the newspaper world, there are plenty of reasons to be pessimistic. There are no shortage of policies or endeavours that an individual reporter might buck against or declare foolhardy or counterproductive. It’s easy to look around at a single newspaper’s operation and think “This could be done better.”
But the court filings released this week suggest that, once Black Press had decided to spend $165 million to buy a paper in Akron, Ohio, its fate was sealed—no matter how well it ran its BC flagship operations.
Having committed to the Honolulu paper—and plowing millions into its operation—Black thought owning another big American newspaper would make his big-city investments more profitable and efficient.
"The fact that we have another good-size daily in the United States might help us, because it enables personnel to move back and forth between Hawaii and the Midwest," Black told the Star-Bulletin after buying the Akron paper. (In BC, reporters dreamed about getting a call that they too could end up writing stories in Hawaii. Those dreams never came true.)
But in the Beacon Journal, Black Press had acquired an anchor when it needed a life preserver.
(Black Press would actually win its Honolulu newspaper war. It bought the Advertiser in 2010 and then closed it down, leaving the Star-Bulletin the state’s sole major daily paper. But the victory didn’t come with the ring of success that it once would have. For one, we don’t know whether the Star-Bulletin has ever made money for Black Press. We do know that, today, it couldn’t be sold for enough money to relieve Black Press’s debt load.)
The court filings blame a combination of technological transformation, the pandemic, and economic dislocation for some of Black Press’s troubles over the past decade.
“The Company’s key challenges are on account of the shift in the way readers obtain their news, which has led to a sizeable loss of readership of its printed newspapers, and the dramatic decline in advertising revenue caused by the loss of small retailers in the communities the Company’s newspapers serve.”
But the filings also say that in the past decade, the company’s “profits have dropped by over half,” implying that the company, or at least many of its properties, remain profitable. (The company’s news administrators say they won’t release information beyond those included in the court filings.)
The big problem is the debt—much of it the legacy of that Akron deal.
Like others were doing at the time, a large chunk of the $165 million Black Press used to buy the Akron paper came via loans. Over the next dozen years, the paper continually lost money, not once posting a profitable 12 months. And in 2018, Black Press sold the Beacon’s assets for $16 million. Before counting the Beacon’s accumulated losses, Black Press lost about $150 million on the Beacon—more than $10 million a year. And so even six years after shedding its Akron anvil, Black Press is still paying back money owing as a result of the paper.
It’s even worse than it sounds. Because Black Press sold the Beacon’s assets—but not all its liabilities. So even today, six years after that sale, Black Press owes more than $45 million US to the pension plan for Beacon employees.
The fallout has inevitably had an impact on Black Press employees in BC—and the readers of the company’s newspapers.
All newspaper chains, whether or not they’re saddled with debt from an ill-fated American adventure, have slashed costs over the last decade as revenues have sagged. But the filings suggest that Black Press has needed to use profits from its local newspapers to pay off its Ohioan losses.
When I left the Vernon Morning Star in 2008, the paper employed 11 journalists. Today it employs four.
The Abbotsford News once had another dozen journalists. Now it has two reporters and an editor.
The same is true at the Chilliwack Progress. Sales desks, front-end staff, and circulation departments are all a shade of what they once were.
Faced with its massive debt, the company has sold off properties across British Columbia, netting more than $45 million, according to the court filings. It has also slashed more than $30 million in costs. Many job cuts have occurred through simple attrition: as employees have left for more promising jobs elsewhere, they have simply not been replaced. Others have been laid off.
But those cuts, clearly, weren’t enough to keep up with the debt. As of last week, the company owed at least $61 million and had only $3 million in the bank. By filing for creditor protection, it essentially admitted that its debts exceeded its assets—it can’t sell enough properties or papers to hope to meet its creditor obligations. The company also promised even more cuts as it tries to find a route toward sustainable survival.
As for the company’s owner, the revelation that Black Press had filed for creditor protection and sold itself to an American newspaper corporation was paired with news of a different sort: David Black retired.
A press release heralded Black “as a pillar of Canadian print media.” It’s hard to disagree.
Among his workers in BC, Black was broadly seen as a benevolent father figure. A decade ago, he would occasionally sweep into a newsroom, shake hands, and ask a couple softly-spoken questions, smiling most of the time. In recent years, he had taken a significant step back from the day-to-day operation of the company, while popping up at award events and functions. (Or, as on at least one occasion, inviting employees to hop on board his yacht as he passed by their community. The invite didn’t go down so well with everyone.) But although bitterness is common among Black Press employees who have left the company in recent years as it scrambled to cut costs and adapt to technology, but few have any unkind words about Black himself. He was an unseen presence: a name on a masthead and, yes, a legend in the community newspaper world.
Rarely too did anyone talk about the newspapers in Hawaii or what had happened in Ohio. The Internet was an ongoing challenge. Facebook was an irritant. Pageviews were demanded by publishers. But the $150 million Ohio-shaped financial hole was like dark matter: something that existed out of sight and hidden from view, even as its gravity exerted an immense and destructive force on the future of BC’s largest newspaper chain.
In recent years, Black was rarely seen as having a hand in low-level operational decisions. He was already mostly retired. And yet, even as recently as 2021, his company was still buying papers in tiny Canadian communities (he bought a small company that publishes five papers in the Northwest Territories and two in Nunavut). Because that’s what David Black and Black Press did.
The question facing the staffs of the newspapers—and those who rely on them for information about their communities—is what comes next? We look for clues in a court filings and other companies’ struggles. Find that story here.