One-newspaper town | Arkansas Blog

Thursday, September 3, 2009

One-newspaper town

Posted By on Thu, Sep 3, 2009 at 10:49 AM

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Big newspaper news breaking

Arkansas Business had the jump on the announcement that the competing Hussman and Stephens news operations in Northwest Arkansas will merge. That's the Stephens' flagship at top. At bottom is one of the local papers Hussman bought up that he stuffs with a NW Ark. edition of his Democrat-Gazette.

This had to happen. Hussman has been committed to newspapers. The Stephens Inc. people liked newspaper profits back in the day when they reliably coined 30 percent profit margins. But a semi-bloody war and implosion of daily newspaper businesses have made the enterprise somewhat less attractive.

I'm guessing that a "merger of news operations" means lost jobs. We shall see. Other Stephens and Hussman papers elsewhere in Arkansas apparently are unaffected.

UPDATE: News now breaking on Stephens Media's Arkansas News website. It published the joint news release, which says the companies will l seek Justice Department approval for a joint venture, with Stephens in charge of editorial and Hussman in charge of business operations in NW Ark, but Hussman continuing to maintain a regional edition of the D-G. They cite operating losses as the reason. They'll make a show of trying to sell the Morning News to an outside investor who'd like to compete with these billionaires, but it is only a show and you need not expect anyone to rise to the offer. There are, of course, other anti-trust considerations in this combine, particularly the Hussman-Stephens might against the smaller media competitors in NW Ark. and elsewhere. Does the Obama administration still believe in anti-trust laws? Previous administrations didn't.

Control of daily newspaper print media in Arkansas is consolidating, with implications for many. It appears that the result will be a regional D-G stuffed in papers bearing imprints of former independent newspapers in Fayetteville, Springdale, Rogers and Bentonville. One newspaper instead of the two currently fighting for readers. Printing jobs seem certain to be lost in that consolidation.

I'd rather own the business side of a joint venture, by the way. And I wonder if Justice will talk about terms of agreement, if any -- length, means of dissolution contemplated, future sole ownership, etc.

To the jump for D-G's breaking coverage:

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— Owners of the two major newspapers in Northwest Arkansas are considering a merger that would produce one comprehensive print news package for the area.

Stephens Media LLC and Arkansas Democrat-Gazette Inc. have asked the U.S. Department of Justice to review a proposed joint venture in which both companies would have an equal financial interest.

Stephens Media owns The Morning News and several weekly publications in Benton and Washington counties and in Missouri. The Arkansas Democrat-Gazette Inc. owns the Northwest Arkansas Times, the Benton County Daily Record and an edition of the Democrat-Gazette zoned for the 12 counties of Northwest Arkansas.

But first, at the request of the Justice Department, Stephens Media must put The Morning News up for sale.

“If someone comes along and buys it, then we’ll continue to compete with The Morning News and this merger won’t be consummated,” said Walter Hussman, chief executive of Wehco Media Inc., which owns the Arkansas Democrat-Gazette. “We suspect that won’t happen.”

If a buyer for The Morning News doesn’t come forth, the merger can take place. Under the agreement, a limited liability company would be formed to be called NorthwestArkansas Newspapers LLC. Stephens Media will be responsible for editorial control of the local newspapers in Northwest Arkansas. The Democrat-Gazette will control advertising, business, production and circulation, as well as the editorial functions of the Northwest Arkansas edition of that newspaper.

“The newspapers will still remain separate entities,” Hussman told a group of about 80 employees gathered at the Northwest Arkansas Times building Thursday.

“It’s a tough thing,” he said, “because we like to compete, and this is sort of the end to the economic competition.”

Times Publisher Jeff Jeffus will be president of the new company.

Hussman said newsrooms will compete to a degree, but the Democrat-Gazette will focus on regional coverage in its Northwest Arkansas section while the other newspapers cover local news in each city. The Morning News would be circulated in Springdale and Rogers, wrapped around the daily Democrat-Gazette, similar to the way the Northwest Arkansas Times and Daily Record are now circulated in Fayetteville and Bentonville, respectively.

“It’s a pretty unique formula in America,” Hussman said of the distribution method currently used for the Fayetteville and Bentonville newspapers.

Hussman said the recession has resulted in newspapers closing, particularly in cities that had two newspapers. But in some cases, such as Ann Arbor, Mich., a city was left without a daily newspaper.

“The recession is so severe, and the economic downturn is so significant,” he said. “A lot of towns are struggling to support a single newspaper right now. ... Our responsibility is to make sure this economy can support one newspaper. We need to make sure there’s always a newspaper for Fayetteville, Springdale, Rogers and Bentonville.”

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