Following the money 

Three of Arkansas's wealthiest families are putting their money into newspapers where the new money is — Northwest Arkansas. 

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Anyone who is hungry for a printed version of the news in the seamless sprawl of cities along old U.S. Highway 71 in Northwest Arkansas can feast each morning upon seven newspapers.

That at least is the number of distinct flags and showy front pages that peer at you from newspaper racks from the suburbs south of Fayetteville to the Missouri border 40 miles to the north. But the appearance is deceiving. Depending upon whose hype you believe and your diligence as a consumer, the seven newspapers actually may number only four, or three, or two. The confusion is sown by a strange alliance of newspaper competitors and by zone editions of the leading paper in the region.

The spate of gaudy newspaper fronts hyping local news is a manifestation of the fierce competition for the booming northwest market among the megamillionaire owners of three newspaper chains -native families with the familiar names of Walton, Stephens and Hussman. But it also is an illusion to this extent: The competitive forces are shrinking, not expanding, and a newspaper monopoly, which is the prevalent condition in American cities, may be only a few years away. Even the dominant players are not confident that it can be avoided, although neither professes to covet such a triumph.

Walter E. Hussman Jr., publisher of the Arkansas Democrat-Gazette and a chain of south Arkansas newspapers, the newcomer to the battle, says the Northwest can provide profits, though not necessarily robust ones, to two or more newspapers unless one or another tries to take over the whole market — a natural business instinct which he nevertheless disavows. Then none will make a profit and a monopoly will become inevitable.

"Show me another 300,000 [population] market with two newspaper entities," Hussman said.

His competitors are Donrey Media Group, based at Las Vegas but controlled by the family of Jackson T. Stephens, the Little Rock investment banker, and, nominally, Community Publishers, Inc., headed by James C. Walton of Bentonville, a son of the late Sam Walton, the founder of Wal-Mart.

Stephens, who ran the biggest investment house off Wall Street, got into the newspaper business in 1993, with typical Stephens moxie, on the cusp of one of the most profitable eras for newspapers in U.S. history. It bought the chain of papers built by the late Donald W. Reynolds and originally based at Fort Smith. Two years earlier, Stephens and his late brother, Witt, had pondered buying the Arkansas Gazette in its last days but passed.

Donrey owns the Morning News of Northwest Arkansas, the dominant paper in the region, which last year began publishing zone editions in each of the four major cities in the metroplex. The names of the cities dominate the flags of each edition, and the front sections of the papers differ, giving the appearance of four distinct hometown papers: the Fayetteville Morning News, the Springdale Morning News,the Rogers Morning News and the Bentonville Morning News. Donrey recently bought three weekly newspapers on the outskirts of Fayetteville, at Farmington, Prairie Grove and Lincoln.

Community Publishers produces the Northwest Arkansas Times at Fayetteville and The Benton County Daily Record at Bentonville. It also publishes the twice-weekly Siloam Springs Herald Leader, several weeklies in Benton County, at Rogers, Bella Vista, Decatur, Pea Ridge, Gravette and Gentry and a weekly at Lincoln in Washington County. Last year it acquired the Harrison Daily Times two county seats over to the east.

But the Fayetteville and Bentonville dailies are now slimmed-down local-news sections that are wrapped around the hefty Northwest edition of the Democrat-Gazette, the result of an unusual agreement between the owners last year that is commonly referred to as "The Alliance."

The Audit Bureau of Circulations treats the two Walton papers as mere editions of the Democrat-Gazette and requires them to say so in their front-page nameplates, although the owners maintain that they continue to be separate papers with independent news and editorial policies.


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