Speaking for the first time publicly since their business relationship soured, Torstar Corp. owners Paul Rivett and Jordan Bitove confirmed there was no reconciliation ahead as their approaches to business were too different.
The two, speaking at the launch of a TVO documentary about the Toronto Star newspaper Thursday evening, were however in agreement that they hope to resolve the split of their partnership as quickly as possible.
Rivett and Bitove are equal partners in Nordstar Capital Inc., an investment company that purchased Torstar in 2020 for $60 million, and controls all of its assets, including the Toronto Star newspaper.
In September, Rivett filed an application to the Ontario Superior Court seeking a court order to wind up the media company, citing “irreparable” damage to his relationship with Bitove, while in October the two agreed to move their dispute to meditation-arbitration.
Bitove, who is publisher of the Toronto Star, emphasized at Thursday’s event the importance of the paper as a civic institution and its adherence to its guiding social principles, while Rivett pushed on the need to diversify revenue streams through experiments like the company’s foray into online gambling because the organization is losing about $1 million a week.
Bitove said the dispute was a “massive distraction” from efforts to turn operations around.
“What kills me inside is we had such great momentum … the best thing is a quick divorce so we can allow our team to move forward,” he said.
Rivett, speaking at a press scrum after the event, said the two were working as fast as they could to get it resolved, with a likely resolution in weeks rather than months.
“Divorces aren’t great, they’re a distraction for sure, and that’s why we’re trying to get it done as quickly as possible. It causes confusion, it causes anxiety.”
He said it was crucial for the company to improve search engine optimization and the delivery of online content, noting that while the New York Times has a margin of around 10 per cent, there are digital content businesses with margins of 80 per cent.
He said that for a news organization like the Star to succeed, there also needs to be more collaboration between the sales and news sides of the business.
“If we want to have advertising on snow tires, we can’t just be constantly writing that we shouldn’t have cars.”
Rivett was previously president at Fairfax Financial, while Bitove was part of the ownership consortium that built the SkyDome, now the Rogers Centre.
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NordStar Capital owners Paul Rivett and Jordan Bitove entered into arbitration Wednesday after mediation talks failed to resolve a fractious dispute between the two former business partners, according to three people familiar with the matter, as the duo seek to divvy up assets that include the Toronto Star newspaper.
Mr. Rivett and Mr. Bitove held two mediation sessions in late October, after Mr. Rivett went to court claiming he and his partner were deadlocked and could no longer work together. He asked the court to dissolve NordStar, a private equity firm in which they are equal partners, and proposed an auction process for splitting up its assets. At a brief hearing on Oct. 3, lawyers on both sides agreed to resolve the matter outside of court and pursue mediation and arbitration, which is conducted privately.
Mr. Rivett and a spokesperson for Mr. Bitove declined to comment.
Even with the assistance of a mediator, the sources say the two owners have so far been unable to agree on how to split up NordStar’s assets, which also include Metroland Media Group and investment stakes in VerticalScope Holdings Inc. FORA-T and Blue Ant Media Inc. The final outcome could now be in the hands of arbitrator J. Douglas Cunningham, a former justice with the Ontario Superior Court.
The Globe and Mail previously reported that Mr. Rivett and Mr. Bitove hoped to resolve the matter by the end of the year. The Globe is not identifying the sources because they are not authorized to speak publicly.
One complicating issue has been the sharp drop in the share price of VerticalScope, a digital media company that operates some 1,200 online communities. NordStar owns a 37-per-cent stake in VerticalScope, which went public last year, and the value of its shareholding hit more than $260-million in September, 2021. It has since fallen to roughly $47-million amid a deep rout for technology stocks.
Mr. Rivett and Mr. Bitove partnered in 2020 to purchase Torstar Corp., the parent firm of the Toronto Star, for $60-million, and pursued new revenue streams to fund journalism, such as launching an online casino and sportsbook when Ontario opened the market to private operators this year.
But the relationship quickly unravelled, as detailed in a court application Mr. Rivett filed in September through companies he controls. He claimed he and his partner had agreed on cost-cutting measures, but Mr. Bitove refused to carry out the plans at the Toronto Star, where he also serves as publisher.
Mr. Bitove also allegedly refused to provide financing for some of NordStar’s early-stage ventures, and reneged on an agreement to sell real estate assets to pay down debt.
As the disagreements deepened, Mr. Bitove attempted to sideline his partner by moving to appoint himself to the boards of various subsidiaries in a bid for greater control, according to the court application.
After The Globe reported on the court filing, Mr. Bitove responded with a statement through communications firm Navigator Ltd., saying he would make no apologies for his decisions at the Toronto Star, while implying Mr. Rivett preferred to “cut costs to the bone.”
Despite the apparent animosity between them, the former partners are scheduled to appear on stage together Thursday evening as part of a panel discussion following the screening of a documentary about the Toronto Star. The film, titled Viral News and produced by TVO, follows the newspaper during a COVID-19 pandemic lockdown and features interviews with Mr. Rivett and Mr. Bitove before their public split.
https://www.tvo.org/video/documentaries/viral-news
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