Stephens Media, Democrat-Gazette to merge NWA operations (UPDATED)
by September 3, 2009 1:58 pm 119 views
The newspaper war in Northwest Arkansas between Stephens Media and the Arkansas Democrat-Gazette is over.
The two media groups announced Thursday morning they are seeking approval for a joint media venture in the area.
Based upon language in the press release, the deal does not include the Times Record in Fort Smith.
Hints of the action was first released by Arkansas Business, and Arkansas Times followed later with this note: “Details currently lacking. But 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.”
Updated info: A source tells The City Wire that Stephens will have two seats on a 5-seat controlling board, which means essentially that Walter Hussman won the newspaper war and will call the shots.
The deal is expected to finalize in late October, with “radical downsizing” of staff to happen in early 2010.
What the deal means for the Times Record in Fort Smith — and the other Stephens-owned papers in Arkansas — is t it will have to find a new method to report on Northwest Arkansas news, to include coverage of Arkansas Razorbacks sports.
The Times Record has a few options, which include depending on the Associated Press, hiring freelance writers and photographers, or using their own small staff to cover university and Northwest Arkansas events.
Max Brantley, editor of the Arkansas Times and a close watcher for many years of the Arkansas media industry, had this to say of the deal: “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.”
Following is the statement released by the two parties.
FAYETTEVILLE, SPRINGDALE, ROGERS, BENTONVILLE, ARKANSAS — Stephens Media LLC and Arkansas Democrat-Gazette, Inc. (owned by WEHCO Media) have requested the United States Department of Justice to review a joint venture between the firms in Northwest Arkansas.
Stephens Media publishes the Morning News, Rogers and Springdale, and various weekly publications in Benton and Washington County, Arkansas and McDonald County, Missouri. Arkansas Democrat-Gazette, Inc. publishes the Benton County Daily Record (Bentonville), the Northwest Arkansas Times (Fayetteville), and a zoned edition of the Arkansas Democrat-Gazette and various weeklies in the area.
The Morning News and the Arkansas Democrat-Gazette’s Northwest Edition have suffered significant financial losses during the current economic recession. Both companies have employed various cost-cutting strategies, but despite these measures, the newspapers continue to have significant operating losses.
Under the proposed joint venture, a new Arkansas limited liability company (LLC) will be formed, which will be equally owned by the parties. The parties will contribute the assets of their Northwest Arkansas daily newspapers (Benton County Daily Record, the Morning News, Rogers and Springdale, the Northwest Arkansas Times, and the Northwest Edition of the Democrat-Gazette) and weekly newspapers, real property, plants, and equipment to the new LLC. Stephens Media will be responsible for editorial control of the local newspapers in northwest Arkansas. Arkansas Democrat-Gazette Inc. will control advertising, business, production and circulation functions of the new LLC, and will be in charge of the editorial functions of the Northwest Arkansas Edition of the Democrat-Gazette.
At the request of the Department of Justice, Stephens Media has agreed to pursue a sale of the Morning News to a qualified buyer who would agree to continue publishing the Morning News separately as a daily newspaper in competition with the Arkansas Democrat-Gazette newspapers and other media. Stephens Media has retained Cribb Greene and Associates, Charlottesville, Virginia, as its broker. Cribb Greene’s telephone number is (434)-971-8344.