SmartMoney talks - interview with Steven Swartz and David Carey - Word One - Interview

Folio: The Magazine for Magazine Management, Nov 1, 1993 by Iris Cohen Selinger

When Dow Jones & Company and Hearst Magazines announced their joint venture two years ago, publishing pundits wondered whether merging editorial, financial and business philosophies was feasible in this highly competitive industry.

But now that its first offspring, SmartMoney, is not only growing (its rate base will jump to 450,000 from 400,000 with the February 1994 issue) but also flourishing (the personal-finance magazine goes to a monthly frequency with the November issue), the first editorial marriage seems destined for success. Word One talked to SmartMoney editor Steven Swartz, formerly of The Wall Street Journal, and publisher David Carey, who hailed from the Hearst camp, on how they make the collaboration work.

Word One: What makes this marriage work?

Carey: Hearst and Dow Jones are run very similarly. We both share a conservative business outlook. We would never invest six figures in a party, but we'll put it in the editorial product.

Word One: Who takes care of what? We understand that editorial employees are considered Dow Jones employees. What about advertising?

Carey: Circulation and advertising initially came from Hearst, but we've also tapped several people who have worked for Dow Jones. There's a lot of experience and clout from salespeople who have worked for the Journal and Barron's.

Swartz: Editorial employees are Dow Jones employees. We hire reporters with the same qualifications and values as those we would hire for The Wall Street Journal. They all go through the same interviewing process. We have people working for us who have had a long history at the Journal. |WSJ managing editor~ Paul Steiger and |WSJ deputy managing editor~ Byron Calame read all the |SmartMoney~ stories before they run. James Stewart |former WSJ front-page editor~ edits stories and attends our story meetings. We're doing the same style of journalism that the front page of the Journal pioneered.

Word One: How are profits and losses divided?

Carey: It's a 50/50 joint venture. But you have to realize it's a much smaller investment than starting up on your own. Manufacturing, production, accounting, circulation and distribution are all already in place. That is a huge start-up cost.

Word One: What advice would you give magazine companies that may be considering a joint venture with a rival company?

Carey: The number-one prerequisite is that you have similar cultures. Most of my staff, some 60 percent, is from Dow Jones and everyone feels very comfortable with one another. Also make sure the resources are a good match, that what you don't have, the other company does. This way there's no pretense as to who should do what.