A Son’s Rise in Arkansas

By: Mark Fitzgerald

Paul R. Smith says that over the years, a lot of people have underestimated his boss, Walter E. Hussman Jr. ? often to their peril. Hugh Patterson sure did. The publisher of the dominant Arkansas Gazette had steered the morning daily to prosperity despite brawls with bigots and boycotters, labor and litigants. Surely, back in 1974, he thought he would quickly dispatch this skinny 27-year-old whose father had just bought the sickly afternoon Arkansas Democrat.

Al Neuharth underestimated Hussman, too. There was no way this mom-and-pop publishing company could survive a hand-to-hand newspaper war waged in Little Rock by

Gannett Co., the nation’s largest chain, still in its ascendancy during the roaring ’80s and headed by its most daring leader ever.

“”Walter’s so polite and such a nice guy that some people perceive that to be a lack of aggression,”” Smith, president of the Arkansas Democrat-Gazette, observes. “”He’s very aggressive. He just doesn’t telegraph it. And that makes him the most dangerous.””

Now, in probably the most parlous period in modern U.S. newspaper history, it appears people are again underestimating Walter Hussman, E&P’s 2008 Publisher of the Year.

He’s out of touch with the new-media realities, they scoff. Take his idea ? which gained wide play after he wrote a high-profile Op-Ed ? that newspapers should charge for the original content they put on the Web. That really throws his fellow publishers, who are racing to digital as if newsprint were Kryptonite. Where’s he been for the last decade, they wonder.

And when it turns out that the Democrat-Gazette’s circulation actually increased last year ? while circ at most metro dailies dropped by hefty percentages ? they say, well, maybe it works in Little Rock, but it would never work here.

The newspaper industry’s new conventional wisdom has made a contrarian of a third-generation newspaper man who says the favorite part of his day is when he gets the proofs of the editorial page.

Conventional wisdom says to shrink “”vanity”” circulation, and retrench to your core market and reliably loyal readers. Hussman publishes zoned editions for towns 200 miles away from Little Rock.

Conventional wisdom says it’s a good idea now to shrink newsholes, accept buyouts from prize-winning journalists, and fire the ones who don’t jump first. “”Walter has never once in all the years I’ve been here told me to lay off anybody because of an economic downturn, or reduce newshole, or restrict circulation in a region,”” Smith declares.

If there’s one canon of the new conventional wisdom accepted universally in the industry, it’s that a newspaper’s best shot of survival is to go local, local, local. Well, Hussman tried that, back when he was that skinny 27-year-old ? and he nearly drove the Democrat out of business. Things turned around when he expanded the newshole, and included news from Arkansas and around the world. So he didn’t alter that strategy after Gannett surrendered in 1991 and the Democrat-Gazette had cornered its core market. “”People in Arkansas expect a paper that takes seriously national and international news,”” says Executive Editor Griffin Smith.

Conventional wisdom these days has largely lost its respect for household penetration, especially with print. Better to hit demographic targets, and rely on the Web for reach. The Democrat-Gazette’s house ads boast of its 85% reach of adults in central Arkansas during a five-weekday and four-Sunday period.

Conventional wisdom says to stop endorsing political candidates, and, in fact consider dropping unsigned editorials altogether, lest readers think coverage is biased. The Democrat-Gazette, which first hung the nickname “”Slick Willie”” on then-Gov. Bill Clinton, has plenty to say about candidates and community. The combination of outspoken editorials and Hussman’s own busy civic activism has been a virtually endless source of material for critics who think publishers shouldn’t be downtown movers and shakers anymore.

“”I am blessed to work for an old- fashioned newspaper publisher,”” Editorial Page Editor Paul Greenberg says in his closet-like office, his 1969 Pulitzer Prize certificate over his head but looking kind of smallish, among a dozen or so plaques for this award or that.

Foresight, hindsight pay off

The old-fashioned label does not entirely fit Hussman, 61. This is a publisher, after all, who began giving away private- party classified ads in the Democrat-Gazette long before anyone had ever heard of Craigslist. “”I kick myself for not thinking of something like Craigslist,”” he says.

Unlike other papers that have adopted free classifieds, the Democrat-Gazette does not limit its free ads to items valued at less than around $200. But the program does come with a typically sly Hussman twist: Customers need to reserve a space. And often, if the category has been filled for the day, they decide to go ahead and buy the ad. Hussman says, “”We make $2 million a year from ‘free’ ads.””

And the Democrat- Gazette Web site has all the features of a state-of-the-art online newspaper, including a staff videographer. It just isn’t free.

Hussman made his case for paid newspaper sites in a Wall Street Journal column last May that attracted much attention and some controversy. Free Web access, he contended, is what’s really behind the slide in circulation, and newspapers are risking their very existence by giving away their news.

“”We were like everybody else when we started out with the Web, giving our content away for free,”” he says. “”And then we started to see our circulation softening. And I started thinking that I’m spending $12 million in Little Rock on the newsroom to get the news ? and then I’m giving it away.””

Fight of their lives

Walter E. Hussman Jr. runs the Demo-crat-Gazette and its parent, Wehco Media Inc. ? publisher of five Arkansas dailies, a Texas daily, and the Chattanooga (Tenn.) Times Free Press ? from a desk that is, well, messy. He shows a visitor a sepia photo from 1912 of his grandfather Clyde Palmer in the offices of the Texarkana (Texas) Gazette that is similarly strewn with papers and periodicals. “”When I see his desk, I think that it’s a genetic trait,”” he laughs.

Newspapers are surely in the family’s blood. Next year will mark the 100th anniversary of Palmer getting the family into the newspaper business with the purchase of the Texarkana Gazette. In conversation, Hussman will frequently refer to advice he got from his father.

But Hussman was forced to find his own way in the business when Wehco bought the Arkansas Democrat and installed him as publisher in 1974.

Faced with the prospect of taking on the morning Gazette, with its high circulation and reach, Hussman followed a playbook that could have come from 2008: He cut expenses to the bone, and focused the small newsroom on local, local, local.

It didn’t work.

Hussman tried to persuade the Gazette to form a joint operating agreement, but he says the Heiskell family owners simply laughed him off. So Hussman reversed course, adding reporters and newshole, covering news of the entire state, starting the free classified programs, and emphasizing service like porch delivery.

Democrat circulation began to soar and the Gazette ran to federal court, complaining that the paper was violating antitrust laws. In 1986, the court sided with the Democrat ? and a few months later, the Heiskell family sold the Gazette to Gannett.

This promised to be an even tougher fight. “”But then Gannett did something for us we couldn’t do for ourselves ? they changed their product,”” Hussman says. “”They featurized their front page,”” and suddenly the city’s longtime “”newspaper of record”” was no longer the first choice for hard news.

And the Democrat beat Gannett in the little things that make a difference in the newspaper business. For instance, the Gazette matched the Democrat’s free classifieds offer in price, but not in service. Every morning Paul Smith would have his secretary call both papers’ free classified numbers to check the response time. Democrat clerks consistently answered within two to three seconds. “”For the Gazette, it was literally two to three minutes,”” Hussman recalls.

In 1991, Gannett gave up and sold the Gazette to Wehco.

“”The key to understanding this newspaper is the 17 years we spent fighting for our own lives,”” says Paul Smith. “”We have had the benefit of having gone through some really tough times, and I think the difference is most people have never seen this kind of adversity. The only question for them was whether they could keep the margins high, not fighting for their lives.””

The result, he says, is a publisher who doesn’t scare easily ? and who can make quick decisions, says Circulation Director Larry Graham. In 1986, Graham recalls, he and another executive went to Hussman with a plan to spend about a million dollars on a circulation-building campaign. Hussman listened to their pitch, and as soon as they were done, told them to go for it. “”I doubt very many publishers would have done that,”” Graham adds.

Civic responsibility intact

On a cloudy day with forecasts of a rare March snowstorm in Little Rock, Hussman drives to the Democrat-Gazette’s production plant, one of the spoils of the newspaper war. “”The one thing about Gannett is they went first class with everything,”” he says, knocking his hand against the line of Goss Headliner color presses. “”We couldn’t afford anything like this. But we inherited it.””

At the time the paper decided to move production to the Gazette plant, the main attraction was the sizable lot that could support future expansion. But now the plant’s next-door neighbor is the William J. Clinton Presidential Library and Museum, and downtown development is heading toward it. The land might prove to be more valuable for development other than additional printing presses.

In many ways, Hussman has been building the city of Little Rock at the same time he was growing the newspapers. His father encouraged him to join civic organizations, and Hussman took the advice to heart. He’s served in one leadership function or another on two dozen Little Rock or national organizations. He’s taken a special interest in public schools both in the city and statewide, donating time, money, and even the old Gazette headquarters to charter schools and after-school programs (see sidebar, p. 35).

“”I think the paper is really making a difference,”” he says as he drives to an after-school program for at-risk teenagers. The building includes the Arkansas Democrat-Gazette Learning Center. In its lobby, to Hussman’s amusement, is a bust of another benefactor, Donald W. Reynolds, founder of Stephens Media ? whose Morning News is fighting the D-G for dominance of Northwest Arkansas.

Some organizations, most notably the state’s teachers union, do not appreciate Hussman’s attention. Little Rock’s alternative paper, The Arkansas Times, has from time to time taken him to task for his public role in school issues. But to hear his executive editor tell it, Hussman has never leaned on the newsroom to back his causes. “”There are no sacred cows,”” says Smith.

Indeed, that’s one of the “”weird things”” about a publisher’s job, Hussman says: “”You have to have a greater loyalty to these anonymous masses reading the paper than to your personal friends.”” Perhaps fittingly, he makes the comment over lunch in a private dining club 15 stories above downtown. A judge stops by the table to say hello.

If the editorial pages sometimes complicate Hussman’s personal relationships, it’s because he insists the paper’s opinions be forceful. “”He believes the newspaper should have a persona,”” editorial page editor Greenberg says. For much of the last two or three decades, that’s meant fighting with Democratic governors such as Bill Clinton. Its big fight now is trying to convince legislators to increase the state’s severance tax on natural gas with the development of a new field.

From its founding well before Hussman owned it, the Democrat was hard-core conservative politically, supporting the segregationist governor Orval Faubus during the nationally watched fight to integrate Little Rock’s Central High School. Today, a statue dedicated to the nine black students in that first integration attempt stands on the statehouse grounds. It was created by Cathy and John Deering, the Democrat-Gazette’s editorial cartoonist.

Northwest bound

If it’s occasionally weird for him being publisher, it’s an unusual business anyway, Hussman says soon after pointing out the Rose Law Firm where Hillary Clinton worked: “”You get 20% of your revenue from the reader and 80% of your revenue from the advertisers, but you have to put the reader first.””

That’s a formula he repeatedly drums into Wehco executives, says Jason Taylor, appointed last year as president of the Chattanooga Times Free Press: “”He’s always saying readers are first, the advertiser is second, the employees are third, and the stockholders are last.””

That puts Hussman at the back of the line. With his wife, Robena, and son, Palmer, 22, a college student, the publisher owns two-thirds of Wehco, having bought out one sister. He also owns 100% of the voting stock. Another sister and her family own the remaining one-third stake. “”Fortunately, Walter doesn’t have to account to [public company] stockholders,”” says Democrat-Gazette president Smith. “”The people in his family understand the newspaper business.”” Hussman, whose twin daughters, Olivia and Mary Eliza, are also still in college, is not yet sure if anyone will follow him into the family business.

That structure also allows Hussman to take some big business risks, such as touching off a newspaper war in Northwest Arkansas.

With its statewide reach, the Democrat-Gazette had always circulated in Northwest Arkansas, though in the range of about 5,500 daily and 8,500 on Sundays. The region had been dominated by The Morning News in Springdale, Ark., a Stephens Media Group daily. When Hussman decided to go into the state’s fastest-growing area ? home not only to Wal-Mart and its many suppliers, but such large employers as Tyson Foods and JB Hunt trucking ? he went big, building a printing plant and adding on more than 300 editorial and production people to what had been a five-person bureau.

In 2000, the Democrat-Gazette partnered with two Community Publishers Inc.-owned papers: the Benton County Daily Record, located in Bentonville, and the Northwest Arkansas Times, in Fayetteville. Subscribers to the papers got a Democrat-Gazette inside the paper. Five years later, Wehco exercised an option to buy out CPI’s share of the alliance.

Now its Northwest Arkansas circulation has grown to about 33,000 daily and 40,000 on Sundays. Both Wehco and Stephens claim to have the circulation edge in the region, and each challenges how the other calculates its claim.

Whether or not it has the circulation lead, the edition is now contributing to the Democrat-Gazette’s bottom line, Hussman asserts. “”Northwest Arkansas started making money some months in 2005,”” he says. “”2006 was the first profitable year, and it was profitable in ’07, though it was down some.””

Hussman argues there’s another reason to maintain regional and statewide ambitions even as other chains retrench to core markets: “”When you’re a state newspaper, your reputation is enhanced, and you’re a little more influential. It would be more profitable not to be statewide, but we look at it like a public service.””

But he’s also aimed to help other papers in his region. Hussman considers one of his greatest accomplishments the Traveling Campus program created by the Southern Newspaper Publishers Association. As SNPA’s president in 2001-2002, Hussman secured pledges from most of the large companies in the industry, increasing the endowment from $1.3 million to $4.7 million (today it has $9.5 million). “”The Traveling Campus program has provided free training to over 30,000 Southern newspaper employees since its inception,”” he notes.

Building loyalty

One area where the Democrat-Gazette admits being late game: niche publishing. The Morning News launched two free weeklies targeting the burgeoning Latino population, and the Democrat-Gazette responded with a Spanish-language product of its own. In Little Rock, after ceding the alternative market to the Arkansas Times, the Demo-crat-Gazette last May launched Sync, a free weekly with much of the entertainment news and listings of the Times but none of its liberal political coverage and opinion.

Still, executive editor Smith happily says that dreaming up new products is not his job. And Smith does not have another duty often piled on editors by publishers these days ? turning the newsroom into a center of 24/7 Internet filing and blogging. “”Walter is a dream publisher,”” Smith adds. “”What I’m not facing as an editor is having my staff pulled from the need to focus on putting out a quality newspaper. I’m not repurposing the staff to run off and do blogs.””

The Democrat-Gazette gets knocked in some circles for supposed diversity issues. Just this February, its state editor, Marilyn Mitchell, resigned with an angry memo attacking the newsroom’s leadership as a “”good ole’ boys club”” that tolerates the casual use of racial slurs and sexual innuendo. The paper just as heatedly denied the allegations.

The paper remains one of a very few big dailies ? the Chicago Sun-Times is another ? that does not report the number of its journalists of color to the American Society of Newspaper Editors’ newsroom census. “”Everybody who has a job here knows he or she got that job on merit,”” says executive editor Smith. Both he and Hussman repeat the story of a black woman asking in so many words at the end of a job interview if she was going to be slotted into some kind of race- related beat or was part of a quota. “”I know what she was saying,”” Smith says. “”Now she has the confidence of knowing she got her job on merit.””

But the staff’s loyalty to Hussman is apparent in conversations around the newspaper. Democrat-Gazette managers tend to stay around, and nearly all the key positions are still filled by veterans of the Little Rock newspaper war. Hussman’s industry reputation attracts new talent, as well. Chattanooga Times Free Press Publisher Taylor, 33, was Gannett Co.’s 2006 Executive of the Year and was content with life in the big company ? but he jumped at the chance to join Wehco.

“”To me, Walter is one of the true geniuses of the industry,”” Taylor says. “”He has a subtle approach, but he’s really sharp. He’s got a proven track record, at a time when this industry is going backward.”” Even now, Taylor adds, Hussman continues to invest in newsrooms: “”I appreciate that coming from publicly traded companies, where it’s just cut, cut, cut.””

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