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the lunch

For John Paton, the future of journalism looks nothing like it used to.

But you can't let the struggles of a beloved industry ruin your lunch, even if lunch is little more than a salad and a few small pieces of raw salmon washed down with a glass of water. Mr. Paton's waist is contracting alongside the newspaper advertising market in the United States, but that's the type of loss you can brag about whenever anyone notices that you've been eating less and taking longer walks.

The topic of print advertising is awkward for many in the industry to talk about openly. Lately, it has been declining at a double-digit pace; the venerable New York Times Co., for instance, recorded a 13.3 per cent decline in newspaper advertising in the first quarter.

Mr. Paton, who got his start as a copy boy at the Toronto Sun, is now in charge of one of America's largest newspaper groups, one with more than 75 daily newspapers in the United States and their affiliated digital properties through Digital First Media. He has also fashioned himself as something of a guru on the new world of selling news in the digital age -- a reputation he carries despite the apparent lack of financial success of some of the entities he manages, such as Journal Register Co., which last year filed for Chapter 11 bankruptcy protection for the second time in three years.

Mr. Paton is undeterred. He sees a fleeting opportunity to build a new industry on the back of the old.

"The business of newspapering has to become the business of maximizing free cash flow to feed the new, growing businesses," he says, swatting away a steady stream of waiters who keep trying to take his salad before he's finished. "Is anyone arguing print isn't challenged forever and a day? Of course it is. Is anyone arguing there's a bottom? Of course there's not. The idea is to recognize that and start building new businesses while you have the opportunity to do so."

Mr. Paton has become one of the most outspoken advocates of the digitization of news since being named Publisher of the Year by Editor & Publisher in 2009, insisting the old models should only continue to exist to fund the creation of new ones. He still loves newspapers, he says, but it's an increasingly one-sided relationship.

"Look," he says. "There's a realization that if the largest part of your business is legacy, it needs to become something else. The question is – what does it become? And the answer to that is, 'Not what it is today.' And that's why you need to build the revenue streams and cost structures to build whatever that is going to be, fully realizing you'll need to fund all of that from the profits of your printed products."

It's a strategy that not everyone buys into, including, Mr. Paton says, some of his own employees. He gets the criticism, but tries to bat it down by saying the Journal Register bankruptcy filings are about getting rid of legacy costs.

"The bankruptcy has everything to do with pension issues, debt and real estate and has nothing to do with performance," he says. "But it becomes about a bankruptcy of ideas, so you need a thick skin. They come at me because I've been so loud about having all the answers. I used to be really comfortable saying that. These days it's pretty uncomfortable."

Mr. Paton spends most of his time planning for a newspaper-free future from a downtown Manhattan newsroom he has named the Thunderdome. It bears little resemblance to the gladiatorial arena from Mad Max Beyond Thunderdome, but there is a battle being waged within its walls as he squeezes whatever money he can out of his newspapers in order to finance their eventual digital replacements.

The Thunderdome was created to provide national and foreign news to all of the company's newsrooms, allowing reporters in each community to focus on local news and ad representatives to focus solely on digital sales. The journalists (and techies) in New York are able to take over any of the paper's websites when news breaks, supplementing their coverage and providing additional resources when needed.

Combined, the chains that the Thunderdome feeds – Journal Register Co. and MediaNews Group Inc., which includes the Pulitzer Prize-winning Denver Post and the San Jose Mercury News – would be the second-largest newspaper company in the United States behind USA Today's Gannett Corp., with 2.9 million subscribers across the country. Its hundreds of websites attract 50 million viewers each month, and the company has rolled out hundreds of apps to get content in front of readers.

Mr. Paton has been vocal in his opposition to paywalls, which are becoming more common as news organizations look for ways to compensate for falling advertising revenues. (The Globe and Mail is one of the news organizations that now limits the amount of free content readers can get online.)

"I think people will pay for things that are worth paying for," he says. "And I would argue that at general interest newspapers, there is a small chance that equals what's in the paper and that's why I don't like paywalls. There's a larger chance to build apps – true standalone products that are different from the Web and different from newspapers. People will buy things that they use differently."

Many of the local newspapers begrudge their increasingly digital focus and the money spent in New York: Mr. Paton estimates 30 per cent of his 10,000 employees are against his plans. Local reporters question why digital journalists thousands of miles away have new computers when they tap away on ancient desktops. Waves of layoffs have also shaken their faith. Thousands of employees have been handed pink slips as he centralizes functions and eliminates duplicated jobs across the dozens of papers (although the number of journalists on his payroll has remained relatively stable, he says).

There are signs he's on to something – he wrote in a note to employees that digital revenue increased at Journal Register Co. by 164 per cent from 2009 to 2012 and the company's digital audience doubled. Across all of his papers, digital revenue is up 20 per cent annually at a time the industry has advanced by low single-digits.

But for all the progress he's made on the digital side, critics have seized on the bankruptcy as proof that his Thunderdome-inspired digital revolution works better in theory than it does in real life. Digital revenue may be up, but they argue the company's decision to bleed its print products to chase "digital dimes" is likely to end badly.

While his strategy plays out high above the streets of Manhattan, Mr. Paton's tactics are slowly working their way through Canada's largest metropolitan newspaper chain. Mr. Paton spent the early years of his career lined up beside Paul Godfrey at Sun Media, and is now a member of Mr. Godfrey's inner circle since taking up a director's seat at Postmedia Network Canada Corp., publisher of the National Post, Calgary Herald and other large Canadian dailies.

He won't talk about official Postmedia business as he eats his lunch, and winces when he's asked about how he came to be sitting in Michael's New York, a mid-town hot spot that pulls in a steady stream of media big shots throughout the day. It's a long way from his days at the Toronto Sun, where he got his start in 1977 by walking into the newsroom with picture of a prominent Torontonian frolicking with a belly dancer named Minka.

"This isn't going to be a story about a plucky little copy boy who rose to become almost a mogul, is it?" he asks, half joking. "It's a little tired."

But there's no denying the importance of his time at Sun Media, which he departed shortly after Quebecor Inc. bought the chain in 1998 and built it into the largest newspaper company in Canada by number of titles. He went from copy boy to reporter, to city editor, to editor, to publisher to general manager and helped developed Canoe – one of Canada's first news portals that is still a key piece of Quebecor's media empire in 2013.

But that was then, and he says things have changed.

He knows there are scores of skeptics lined up against him, many of them firmly ensconced in the newspapers he owns across the country. But there is a flip side – if he's made the wrong bet, there will be fewer newspaper journalists around to rub it in.




Born 1957, Glasgow, Scotland.

Emigrated to Canada, 1963.

Bachelor of applied arts in journalism, Ryerson University, Toronto.

Harvard Graduate School of Business Administration, finance for senior executives.


John Paton has worked his way from the bottom of the newspaper industry all the way to the top, first as a copy boy at the Toronto Sun in 1977, before moving on to become a reporter, city editor and assistant managing editor. He was also the editor-in-chief and publisher of the Ottawa Sun and London Free Press. He then served as vice-president at Sun Media and chief executive officer of its online porter Canoe. He is now chief executive officer of several news companies – Impremedia, Journal Register Co., MediaNews Group, and Digital First Media.


Publisher of the Year in 2009 by Editor & Publisher.

Distinguished Alumni Award, 2006, Ryerson University.


On innovation: "I watched a guy demonstrate how an ad can be built algorithmically for a client he had never met. It fit all platforms and took 60 seconds to build. I was stunned. This is a war of dimes – we need to find cost-effective ways to make some money."

On new ideas: "I spend a lot of time in Silicon Valley compared to most newspaper executives. I want to be with people who expose me to ideas that aren't newspaper-related but are definitely media-related."

On job cuts: "People will tell you there's nothing left to cut. Well guess what – if you go out of business, there's 100-per-cent more you can cut."