Quality Key to Highest City Zone Penetration in U.S.

Newspaper Research Journal, Fall 2004 by Pardue, Mary Jane

Pursuing innovations to better serve readers and refusing to sacrifice news quality to maximize profits, the Hussman family has transformed a struggling afternoon newspaper into the current Arkansas Democrat-Gazette.

At 3:30 on a dreary November afternoon, a dozen editors in Little Rock gathered in a small conference room scanning story budgets, engaging in the familiar banter of journalists ready to choose the lineup for tomorrow's front page. They had drifted in moments before, armed with story lists from their respective departments-wire, sports, business, metro. On this particular day, it was the certifying of Little Rock's special election results, the 6 percent national unemployment rate for October and the crash of an Army Black Hawk helicopter in Tikrit, Iraq. Eighteen minutes later, decisions made, they filed out. "It was easy today," one said. "We had some news."1

It is a ritual repeated in newsrooms throughout the nation's 1,457(2) dailies. The Arkansas Democrat-Gazette was a typical major metro daily. But there was something different this particular week. The latest ABC report showed the Democrat-Gazette had reached 71 percent Sunday city zone penetration, the highest in the nation for major newspapers.3 The question is how did a once underdog, blue-collar conservative voice of the people, predicted to lose against its rival Arkansas Gazette and later the behemoth Gannett, survive and reach a pinnacle of success unmatched by media empires today? The answer is simple. The Democrat-Gazette is different.

Arkansas' largest newspaper is one of only 12 independently family-owned newspapers with a circulation of more than 100,000 in the nation today.4 In fact, the Democrat-Gazette posts circulation at 183,343 Monday through Saturday and 285,538 on Sunday.5 But beyond its local ownership, it has a unique culture that reflects the business strategy and philosophy of one man-publisher/owner Walter E. Hussman Jr. "My dad used to say that any company is the length and shadow of one man," Hussman said.6 The reality is that Hussman represents a culture ingrained in the newspaper since he took over as publisher at 27 when his family bought it in 1974(7) Hussman followed the traditional publisher's role: maintaining profit and editorial excellence and developing strategies for the entire operation. But he has developed a corporate culture that represents "a system of shared values (what is important) and belief s (how things work)"8 that has driven the Democrat-Gazette for decades.

In an industry marked by "relentless chain-building, consolidation and corporate centralization,"9 where four out of five of the nation's newspapers are owned by media conglomerates,10 the Democrat-Gazette overshadows corporate rivals. Why does it work so well in Arkansas? What is the newspaper's business strategy? How does Hussman's leadership style create intense loyalty among his staff? Industry insiders and academics have watched the newspaper for years, at times convinced that there was little hope-that Hussman could not beat the odds against him. But if the Democrat-Gazette's success lies as much in Hussman's leadership style as in his business acumen, others can learn from him.

Fink listed five traits of successful leaders:

* clarity of purpose, the ability to act decisively, persistence

* a strong need to succeed, to achieve on the job

* a desire for responsibility and the wish to supervise other

* confidence in oneself, a high regard for one's own abilities

* sound judgment and verbal intelligence, flexibility in thinking, a willingness to try new ideas and methods11

Hussman, a model of those traits, in 30 years has put together a management team that, as Fink suggested, "set the tone for the newspaper's operation." They are aggressive managers, alert, action-oriented and focused on common goals.12 It is impossible, however, to look at the success of the Democrat-Gazette today without looking at the struggles of the newspaper's past.

History

Hussman, who majored in journalism at the University of North Carolina and earned an MBA from Columbia University, was a business reporter at Forbes magazine in New York in 1970 when his father, Walter E. Hussman Sr., persuaded him to return to Camden to help run the family business. The family owned newspapers in Texarkana, hot Springs, El Dorado and Magnolia. "He was thinking about retiring and said I might want to give it a try," Hussman said.13 He became general manager of the Camden News, then vice president and general manager of Palmer Newspapers.

In 1974, the family company, WEHCO Media Inc., bought the Arkansas Democrat for $3.7 million from Marcus George and C.S. Berry. The afternoon daily had a circulation of 62,405, far overshadowed by the morning Arkansas Gazette with 118,702.14 The Democrat had about a quarter share of the market revenue. "We thought we would streamline the operation and reduce costs ... make a little money each year, and over time slowly increase our market share," Hussman said. Instead, the Democrat struggled. Circulation drifted down to 55,000, and costs grew. In 1977, Hussman sought a joint operating agreement with Hugh Patterson, then-owner and publisher of the Gazette. The JOA offered Patterson 100 percent of profits up to what the Gazette had made the previous year. Of the next $600,000, the Gazette would get $300,000 and the Democrat would get $300,000 to meet note payments over 20 years. After that, the Gazette would get 90 percent, and the Democrat would get 10 percent. Patterson's response was simple-no deal. "They thought we were about to go out of business, and they were right," Hussman said. Faced with being, a 31-year-old "spectacular failure," Hussman reassessed. He said the Democrat had always thought of itself as a complement to the Gazette. It was time to become an alternative.15