In Old Boys: The Powerful Legacy of Upper Canada College, a collection of essays by former students of the tony Toronto private school, David Kenneth Roy Thomson, son of the late Ken Thomson, reminisces about being a 10-year-old trying to improve his soccer skills. He describes working “hard every night and every weekend, back and forth, left foot, right foot.” Over time, a determination to become a better athlete helped foster “a tremendous work ethic” in the boy, which helped him overcome some of the insecurities and inhibitions he had developed at UCC, where, despite his family's wealth and status, he was often teased and isolated. Getting better at the game represented a triumph of will. “I was working towards a goal, exceeding my own expectations and having people realize that my capability was of my own making, not a social inheritance,” Thomson writes. “In my lifetime, I would be a success, but on my own terms.”
Those words, first published in 1994, are even more significant today, as Ken Thomson's eldest son, 49, settles into replacing his father as co-chair of the Thomson family's holding company, Woodbridge Co. Ltd., sharing duties with his brother Peter, 41. (Their sister, Lynne, 47, now known as Taylor, is not participating in running the family business.) That's in addition to his duties as chairman of Thomson Corp., a position he has held since 2002, when his father gave up the title. Many are now looking to see if David will continue to build the family empire.
Since Ken Thomson died of a heart attack in June, those close to the family's affairs say not much has changed at either Thomson or Woodbridge, which owns 65% of Thomson. They note that a succession plan had been implemented years before Ken's death. Roger Martin, dean of the University of Toronto's Rotman School of Management, who sits alongside David and Peter on the Thomson board of directors, says he is somewhat perplexed by the “whole 'gosh it must be different'” reaction now that the patriarch is gone. “We all miss Ken. Ken was a wonderful human being,” he says. “But at the same time, a transition had been made a long time ago.” That succession plan, Martin notes, was some 10 years in the making. The truth of the matter is that it feels like the status quo.”
When announcing that David would eventually take over, Ken Thomson praised his son's abilities, saying he was “very, very intelligent” and had a “huge energy level.” Much like his father, David paid his dues working on the lower rungs of businesses that Woodbridge controlled. For instance, he sold socks at the Hudson's Bay Co.'s flagship store in Toronto and was posted to one of its fur-trading depots in Prince Albert, Sask. In 1987, he became president of Hudson Bay's discount department store division, Zellers, and shortly after moved to Simpsons. A couple of years later he founded real estate company Osmington Inc.
Keen observers are anxious to see if David will be able to steer Thomson, based in Stamford, Conn., to greater heights as it completes its transformation from a mainstream media company into a provider of electronic data for lawyers, educators, scientists and other professionals. He and brother Peter will also be involved in restructuring Bell Globemedia, which owns the Globe and Mail, CTV and cable channels that include TSN and Discovery. The Thomsons have, through Woodbridge, raised their stake in Bell Globemedia to 40%, partnering with Torstar Corp., owner of the Toronto Star, and Ontario Teachers' Pension Plan. Bell Globemedia's former controlling shareholder, BCE Inc., has retained a 20% stake, but Woodbridge, as the largest shareholder, will likely call the shots.
David has much in common with his father, whom he very much admired. “He has wanted me to do my utmost,” David says in Old Boys. The two shared an appreciation of art. In 2002, David helped convince his dad to pay £49.5 million, or about $117 million, for the Massacre of the Innocents, by Peter Paul Rubens. It is the most expensive Old Master ever auctioned.
Ken Thomson, in addition to being a smart businessman, was known as a somewhat eccentric, kindly soul, who was dotty over his dogs and predisposed to sending small gifts and thank-you notes — despite a reputation for being tight with his money. David appears to be more guarded. As he notes in Old Boys: “When I first started in the prep, I was cycling along a bridge with another little seven-year-old UCC chap. He said to me, 'My mother is so happy that we are friends because you are going to be able to do so much for me later in life. I remember thinking, I wonder what it is that I am going to do for this chap? Then I grew up and realized: So that is the way it is. That is what people expect.”
Certainly, it's experiences like that one that have shaped a lot of David Thomson's cautious, intense outlook. “I lived, for so many years, feeling a sense of helplessness,” he wrote. “Now I am extremely self-sufficient and rather overly aggressive. I am not mean, but I do not hide any more from anyone. In fact, I seek out places where I can go straight on in situations with people. I love it.” It would appear, then, that David does not consider himself a shrinking violet — a definite plus when heading a family empire worth an estimated $24.4 billion.
As well, David has a strong second-in-command in Woodbridge president Geoff Beattie. He plays the same role that John A. Tory did for Ken Thomson, providing the day-to-day managerial smarts to execute business strategy. Says Rotman's Martin: “It's professional management that runs Thomson Corp., and Woodbridge is the main shareholder. It provides help, assistance, guidance, but they [the Thomsons] just attempt to be good shareholders. They can encourage bold moves that maybe a company that didn't have such a long-term view wouldn't make.”
Indeed, the family's willingness to rely on professional management will come in handy as Thomson Corp., which had revenues of US$8.7 billion in 2005, continues to transform itself. Thomson sold off almost all of its newspaper assets years ago, and this fall, in the latest stage of its evolution, Thomson said it would sell off its learning division, which analysts say could bring in more than US$4 billion.
Lauren Rich Fine, a New York-based analyst with Merrill Lynch, said in a recent research note that she understands the rationale for the sale, pointing out that she admires a company “that can acknowledge when an asset does not fit strategically.” The proceeds, she predicted, could be used for future acquisitions and debt payment. Thomson, she added, “has clearly made headway in integrating its various products into value-added solutions” and in fulfilling a promise to “move from a media into an information company almost a decade ago.”
Back in 2000, when Ken said he would be stepping down and his son would head the board, David's reaction was: “My journey has yet to truly begin.” If that was true back then, it's even more so today. This time, with the patriarch gone, the current generation of Thomsons will be making that journey on its own.