The clash of the media barons: Inside Jordan Bitove and Paul Rivett's battle to control Torstar

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Shortly after Jordan Bitove and Paul Rivett bought the Toronto Star two years ago, they moved into an office at the newspaper’s headquarters that provided a view of Lake Ontario below. It had once been occupied by John Honderich, the bow-tied former editor and publisher, who died this year at age 75. The newsroom was deserted owing to the pandemic, but Mr. Bitove and Mr. Rivett shared the space and installed two standing desks. The act was symbolic, intentional or not. Here stood two captains of a storied newspaper, charting a new course, shoulder to shoulder. At a virtual town hall, the company’s then vice-chair, David Peterson, couldn’t help but remark on it. “There aren’t many people who could be in the same office for four months and not fight,” he said.

Earlier this year, Mr. Rivett moved out. He decamped to the newsroom, visible for all to see peering over his standing desk, but alone. In retrospect, it was a sign that something wasn’t right between him and Mr. Bitove. Almost nobody knew how bad it was until Mr. Rivett went to court this past September seeking to wind up NordStar Capital, the private-equity firm he started with Mr. Bitove, saying the two of them could no longer work together. News of the court application sparked weeks of anxiety at the Toronto Star and Metroland Media Group, which publishes more than 70 community newspapers, as employees stewed over who would ultimately take charge.

That question is now settled: Mr. Bitove took full control of parent company Torstar Corp. last month after a handful of mediation and arbitration sessions, and Mr. Rivett walked away. The more pressing matter is how exactly Mr. Bitove will ensure a profitable future for the Toronto Star and Metroland with a business model that has been upended.

Mr. Bitove declined an interview on these questions and others, but he sent a lengthy statement through communications firm Navigator Ltd. “In the last two years we’ve seen growth in market share, and in subscription revenue. … We’ve also made tough but necessary business decisions, like selling underutilized real estate, without harming our newsroom,” he said. “As a result, the Toronto Star is once again approaching profitability – a target we have set for this year.”

Left unsaid is whether that progress is because of – or in spite of – his partnership with Mr. Rivett. He, too, declined an interview but told The Globe that, “Integrity, kindness, loyalty and honesty are values that are integral to me, and those who know me well know that these guide my relationships and the way I do business.”

The original promise of their union was to combine two different skill sets to create something powerful and lead the Toronto Star into a new era. Mr. Rivett once described it as a case of “two plus two equals five.” He comes from the school of value investing, the idea of buying into unloved companies with the certainty of seeing potential where no else can. Mr. Bitove, meanwhile, is an extroverted and well-connected scion with a marketing background whose family is known for audacious projects. The two of them were going to turn the paper around (”fix it,” they said) by attracting digital subscribers and building new revenue streams, even quixotic ones, like launching an online casino and sportsbook.

What’s surprising is how quickly it fell apart. In many ways, they were like infatuated lovers who rushed into marriage. They’d never worked together before – let alone in the news business – but formed an equal partnership that apparently lacked a shotgun clause, a common mechanism in such arrangements. The provision allows one partner to buy out the other, or be bought out themselves, when the relationship breaks down. Their brief stint as joint newspaper barons was rocked by turmoil not only between each other, but with employees, too. (The Globe and Mail spoke to 18 current and former employees, and has granted confidentiality to sources to speak candidly and preserve professional relationships.) In the end, the duo clashed on the most crucial of issues: where to cut costs, where to spend money and who to hire. Perhaps the only thing they’re likely to agree on these days is that it would be better if they’d never met.

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There was a time when they were just a couple of dads who knew each other through their sons’ hockey teams. (Mr. Rivett has three kids, while Mr. Bitove has four.) Trained as a lawyer, the 55-year-old Mr. Rivett came up through the trenches of Bay Street, aided by a keen financial mind. He lives with his wife, who works in the mental-health field, and keeps a honeybee colony on their property. You’d have a hard time finding a picture of him before he purchased Torstar; he prefers to stay out of the spotlight.

That’s where Mr. Bitove thrives. At his wedding reception, he slipped away from guests and reappeared in a white polyester suit, cape and wig to ham it up. He and his wife, a former model who runs a clothing boutique, purchased a US$10.8-million mansion in Florida this year, with palm trees drooping over the backyard pool. The 58-year-old is a consummate networker, with a burbling font of emotion. Often during company town halls, he’d get choked up talking about the newspaper, and Mr. Rivett would have to continue.

Still, there was one thing they had in common: for much of their careers, their names had mostly been associated with someone else. Mr. Rivett worked for 17 years at Fairfax Financial Holdings, most recently as president, with founder Prem Watsa, the famed value investor often likened to Warren Buffett. Mr. Bitove, meanwhile, is the youngest of five siblings in a celebrated (and occasionally maligned) business family. His older brother John brought the Toronto Raptors to the city in the 1990s; Jordan, meanwhile, founded an experiential marketing company that worked on Canada’s Walk of Fame and other events – not necessarily the kind of venture to make history. But buying the Toronto Star, which traces its roots to 1892 – that’s the kind of thing with Bitove written all over it.

Torstar, the parent company, had long been in financial decline, despite the quality of its journalism. Publicly traded shares peaked in 2004, only to crash 99 per cent by May, 2020. Head count has shrunk at the Toronto Star, too, dropping from 610 unionized employees in 2009 to 178 as of September, 2022, according to Unifor. Part of the damage was self-inflicted, such as spending tens of millions on a failed tablet app. More fundamentally, though, the company couldn’t escape the forces dragging down many traditional news outlets. Torstar gave away its content as the internet took off, Google and Facebook swallowed up the online ad market and print revenue dwindled. By the time the company realized it had to win over digital subscribers, it was way behind.

At the time, the company was controlled by a voting trust consisting of representatives of five families, each with a connection to the Toronto Star’s history. By August, 2019, a year in which Torstar would lose $51.9-million and see revenue slide 12 per cent, the trust was ready to sell.

Mr. Bitove made an unsolicited bid in February, 2020, and met privately with Torstar chair John Honderich. He was bursting with infectious enthusiasm, Mr. Honderich wrote in a posthumous memoir published this year. Mr. Honderich gave him a copy of Humanity Above All, a history of the newspaper, and the next day, Mr. Bitove met with the seven members of the voting trust to make his pitch. He’d stayed up late reading the book, recited his favourite passages, and charmed them with an anecdote about delivering the Star as a kid. Repeatedly, he emphasized his commitment to the Atkinson Principles, a near-religious code guiding the progressive paper’s reporting. “We thought he would be the person to take the Star forward and not implement the usual cutting to the bone that destroys a franchise,” said Campbell Harvey, a former trustee.

Mr. Rivett left Fairfax that same month but agreed to stay on as its point person on the Torstar sale. Fairfax, after all, was a large shareholder, with a roughly 40-per-cent stake in the company. By April, Mr. Rivett decided instead to partner with Mr. Bitove. Purchasing Torstar would be the completion of a deal neither he nor his old boss, Mr. Watsa, had been able to see through a few years earlier, when Fairfax attempted to buy Torstar. The two sides couldn’t agree on how much the company was worth, and talks stalled.

In August, Mr. Bitove and Mr. Rivett triumphed over a rival bid to close the deal, paying just $60-million. Torstar had nearly that much cash on its books and a large stake in VerticalScope Holdings Inc., a digital media company that operates web forums. (That stake would hit $180-million last year, when VerticalScope went public.)

As for Mr. Honderich, he felt he’d passed the newspaper into safe hands. “It was time for someone else to try,” he wrote.

Not everyone was as serene about the transfer of power, and the sale fuelled anxiety at the paper. Here was a Bay Street investor and a rich kid with no experience operating a news company, neither one known for their liberal leanings, who were borrowing tens of millions from Canso Investment Counsel, a major lender to National Post owner Postmedia Network Canada Corp., to complete the purchase. Were they going to kill the Star’s progressive political bent? Fire everyone? Sell to Postmedia and then fire everyone?

The new owners tried to head off these concerns. “You can’t grow revenue on the back of cuts,” Mr. Rivett told the paper in an interview shortly after the deal was announced. They recruited David Peterson, the former Liberal Ontario premier (and long-time Bitove family friend) to serve as vice-chair and presented him as a bulwark against any right-wing pressure. Internally, they built up goodwill. The Toronto Star’s internship program returned after it had been slashed to save money, and they hired reporters for the paper’s Ottawa bureau and long-neglected business section.

Anyone who saw them witnessed a bromance in full bloom, two guys giddy at the prospect of an adventure. Neither proved to be a passive owner. Mr. Bitove took on the mantle of publisher with an almost theatrical approach. He proudly showed off a vintage Toronto Star sweater during a town hall and spoke of meeting with local leaders in communities where Metroland publishes, talking about how they’d impressed upon him the light journalism shines on issues such as the opioid crisis and homelessness. In a documentary about the Star called Viral News, which was filmed before the split, Mr. Bitove comes off as a man who believes he’s found his purpose in life. His children never really understood what he did for work, he says in the film, but that changed when he brought them to the Toronto Star. “The pride that they took in me being the publisher was incredibly powerful,” he says.

Mr. Rivett, meanwhile, initially viewed the company as a “big fixer-upper” and took longer to appreciate what a newspaper could do. The moment came during the first year of the pandemic, as seniors died alone and neglected in long-term-care facilities. One Saturday morning, he wrote the first draft of a letter calling on elected officials to address the problem. The final version ran across the newspaper chain in January, 2021, signed by both owners. “This is when the light went on for me that this is more than just a turnaround,” he says in the documentary.

Off-camera, tensions were building. Wayne Parrish, Torstar’s senior-vice president of editorial, abruptly left the company in January, leaving employees to speculate about his departure. Some of the details are contained in a $1.5-million lawsuit he filed against Torstar the following month. According to the statement of claim, Mr. Rivett allegedly dismissed him for cause but refused to tell him what exactly he’d done wrong. Mr. Parrish later received a letter from Torstar. “You have engaged in conduct and comment which has been disparaging of the leadership of the company,” it said, going on to accuse him of acting “in an insubordinate manner.” Mr. Parrish, who declined to comment, claims he was let go as a cost-saving measure, and the allegation of cause was a pretext to avoid paying severance.

Torstar, in a statement of defence, alleged that he repeatedly mocked Mr. Rivett’s and Mr. Bitove’s leadership and journalistic knowledge to other employees, and “worked to establish himself as the ‘protector’ of journalistic integrity.” In a reply, Mr. Parrish said both owners interfered with the Toronto Star’s reporting to promote related businesses, according to a court filing. The allegations have not been tested in court.

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Behind the mutual admiration the two owners projected, there was a more complex dynamic developing. In the beginning, Mr. Bitove tended to defer to his partner, perceiving him to be the more experienced operator. But he started to assert himself, particularly as he believed Mr. Rivett made mistakes, according to two sources.

Torstar’s efforts to decide on a more powerful content management system (CMS), for example, were anything but straightforward. A CMS is the unglamorous but crucial software for writing, editing and publishing articles. Torstar considered Arc XP, owned by the Washington Post. Mr. Rivett, according to two people familiar with the discussions, balked at the cost and instead pursued a different solution in partnership with another company. His goal was to develop a platform that could be used by other publishers and develop a new revenue stream for Torstar. But after months of talks, it was clear the partner company couldn’t deliver.

More fundamental, however, were competing visions about where to invest and where to cut. Some time after the sale, Torstar engaged in discussions with Postmedia about a potential combination with the company, according to two people familiar with the matter. A deal between the two newspaper publishers has long been rumoured in the industry, as it could potentially lead to significant cost savings. But it’s also the kind of arrangement that fills some in the business with concern, particularly around how consolidation could affect resources and, ultimately, the quality of journalism.

The two sides, however, never came to an agreement. Mr. Rivett, concerned about Torstar’s cash holdings and burn rate, brought in a consultant early on who specialized in restructurings, insolvencies and troubled companies. The consultant’s role, according to four sources, was to find ways to cut costs, including in the Star’s newsroom. At some point, proposals were made that would have resulted in a significant reduction in the newsroom headcount, according to two of the sources.

By the fall of 2021, Mr. Bitove was objecting to the consultant’s very presence and put a pause on his work, according to one source. He was also concerned about the costs associated with NordStar’s other ventures and refused to allow a tranche of funding to go ahead for the online casino division, which launched earlier this year. The divergence is apparent in the court application Mr. Rivett filed in September, where he notes that Mr. Bitove refused to carry out cost-cutting measures at the Toronto Star that had been agreed to, and changed his mind about funding NordStar’s early-stage ventures.

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Hiring proved to be another major flashpoint between the two. Earlier this year, they set about filling the role of CEO and president of the Toronto Star. Mr. Rivett was enamoured of Marina Glogovac, a director on the VerticalScope board, where he is also chair. But Mr. Bitove was less impressed, according to three sources, and didn’t want to bring her in. Moreover, Mr. Rivett wanted her role to include editorial oversight, whereas Mr. Bitove did not. Ms. Glogovac had spent the past nine years as the head of CanadaHelps, a provider of fundraising technology to charities, and her last media job ended in 2004.

The company announced her appointment in April, 2022, citing her passion for journalism and technology background. But then the newsroom found her Twitter account.

Ms. Glogovac had written that she would never step foot in an establishment requiring vaccine passports (“Did the living in a communist country thing, thank you”) and later warned that the public health measure was part of a “psychological phenomenon that enabled all totalitarian regimes.” In another tweet from July, 2021, she suggested that Pfizer was influencing Ontario government policy. “We are witnessing a policy and government capture by a massive corrupt drone corporation,” she wrote. “Dig deeper folks.” (Ms. Glogovac did not respond to requests to comment.)

This, to some, was heresy. A letter to management was hammered out and signed by around 80 employees. “The personal views expressed by Ms. Glogovac about vaccines and mandates directly oppose not only the stance this paper has publicly taken but also our science-based approach to covering the pandemic,” the letter read. “They are also bad for business, undermining the Star’s brand.”

The signatories weren’t satisfied that Ms. Glogovac had later said the tweets were “hasty and ill-considered,” and the letter asked for written assurance that her views would not affect editorial coverage. But even that might not be enough: “The idea that the CEO of a news organization … can be a purveyor of and believer in outright misinformation – and even conspiracy theories – is a dangerous one.”

Ms. Glogovac’s official start date was in June, and a virtual town hall was convened for the owners to address the controversy. Mr. Rivett acknowledged that some people were upset by the tweets but held firm on hiring her. Nobody had vetted her social media before she was appointed, an admission that irked some reporters who carefully monitor their own feeds. Mr. Bitove, meanwhile, looked upset. Accounts differ slightly, but he delivered a meandering and bewildering soliloquy about the divisiveness of technology and social media, the negative effects on youth, and, eventually, shed tears. (Mr. Rivett offered a tepid backpat, one observer recalls.)

Anyone who witnessed the display could tell the two owners weren’t aligned. Mr. Bitove wanted to dismiss Ms. Glogovac before she joined, according to a person familiar with the matter, but a compromise of sorts was reached. She came aboard as planned, but only as president, not CEO, with no editorial component to her job. Mr. Bitove, though, did not allow her to move into the corner office occupied by Torstar’s former president and CEO.

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When news broke in September that Mr. Rivett had filed a court application to dissolve NordStar and split its assets, employees at the Star were gobsmacked. Reporters, as is their instinct, got their hands on a copy of the application and pored over it to make sense of the surreal situation. The two men were “deadlocked,” they read, the relationship “irrevocably impaired.”

The feud was only briefly in the public eye. Both sides agreed to take it out of court and attempt private mediation to agree on who would get what. When that failed to produce an outcome, the dispute moved into arbitration. Broadly, the process was of the “cut and choose” variety, according to two people familiar with the discussions. Mr. Rivett divided NordStar’s assets into two groups and assigned each a value; Mr. Bitove then had to choose which bundle he wanted.

The two finally reached an agreement on Nov. 24. By then, the Toronto Star had moved from its headquarters of 51 years in a drab brown building at the foot of Yonge Street into a new, sleek space farther west. That day, Mr. Rivett was working in the newsroom at his standing desk when news broke that his former partner would take ownership of the Star and Metroland. He later huddled in a glass-walled meeting room backed by two TV screens displaying large, roaring flames. Not long after, he left the building, and Mr. Bitove strolled in.

The deal was officially announced in a press release early that evening with a cordial tone masking the animosity between the two men. The change was effective immediately, and Mr. Bitove wasted no time: Neil Oliver, a long-time executive, was appointed CEO of Torstar. Ms. Glogovac, who some staff spoke highly of once she joined, was gone.

It’s not yet clear how all of NordStar’s assets have been divided, including the gaming operations and the company’s 37-per-cent stake in VerticalScope. (At its peak, Torstar’s holding was worth some $266-million, but has fallen to $40-million amid a rout for tech stocks.) Mr. Bitove has recently taken steps at Torstar that suggest he’s conserving cash to focus on the newspaper business. Torstar will be shutting down a subsidiary called Eyereturn Marketing by the end of January, and all 28 employees will be let go. (Spokesperson Bob Hepburn said the closure is due to “financial challenges” facing Eyereturn.)

Mr. Bitove has yet to detail publicly his plans for the Toronto Star and Metroland, but he gave some indication in November, during a panel discussion at the Isabel Bader Theatre in Toronto following the premiere of the Viral News documentary. He sat on one end of the stage, Mr. Rivett on the other, with three panelists between them. Boosting digital subscriptions was key, he said, noting the company had between 130,000 and 140,000 of them, up from nothing a few years ago. Building new audiences, even globally, was important, and he brought up the Star’s coverage of long-term-care facilities. “Why shouldn’t that be something that, whether you’re in Stockholm or wherever, that you are embracing?” he said. He then took aim at Google and Facebook. “We’re battling the tech giants,” Mr. Bitove said. “We have to put some form of regulation on them, and we need to get our fair share of all the revenue that they take from us.” (Torstar has signed revenue agreements with Meta and Alphabet, as has The Globe.)

As he went on, it seemed like profit was almost secondary to him. Maintaining margins was “wonderful,” but he was eager to show he had higher goals in mind. “We have an obligation to protect the Atkinson Principles and to protect democracy,” Mr. Bitove said.

There has long been tension between those competing realities at the Toronto Star: profit versus principles. Mr. Honderich, a man whom Mr. Bitove admired, grappled with it, too. He at least had the good fortune to live through the glory years. Last month, Mr. Bitove turned up at the Toronto Reference Library for the launch of Mr. Honderich’s memoir. The night had an elegiac feel, not just because the man of the hour had passed away nine months earlier, but because on stage, a panel of current and former Star journalists spoke of an era of journalism that no longer exists, a time when budgets seemed endless.

The rueful air didn’t seem to bother Mr. Bitove. He stood at the back of the room, behind rows of onlookers, an inscrutable smile on his face. As the panel reminisced about past triumphs, he turned his back and drifted away to the reception area to mingle.