The Top 10 Business Stories of 2009

by Arkansas Business Staff  on Monday, Dec. 28, 2009 12:00 am  

No. 10
Northwest Arkansas Newspaper Truce

One of the scrappier newspaper wars of the past decade ended not with a surrender but with a cease-fire.

In September, Stephens Media LLC and Arkansas Democrat-Gazette Inc. announced a merger plan that would effectively turn Stephens' daily papers in Springdale, Rogers and Bentonville into zoned editions of the Democrat-Gazette, which had launched its incursion into the booming northwest Arkansas market a decade ago.

On gaining approval from the Justice Department in October, the 50-50 partnership, named Northwest Arkansas Newspapers, held virtually every daily and weekly paper of any consequence in the northwest corner of the state, foremost among them The Northwest Arkansas Times, the Benton County Daily Record, The Morning News and, of course, the local edition of the Democrat-Gazette.

Walter E. Hussman, the publisher of the Democrat-Gazette, won the state's previous newspaper war, one decided in part by his decision to give away classified advertising in the Democrat.

This time, too, he was bleeding, but not by choice: the Democrat-Gazette's ad revenue was down 18.5 percent in the first nine months of 2009, after a plunge of 13.2 percent in calendar 2008. Those losses trended with newspapers' nationwide meltdown; ad revenues were down 17.7 percent in 2008, the third straight year of decline, according to the Newspaper Association of America. The first nine months of 2009 saw ad sales drop another 28.4 percent.

Those numbers couldn't stand. A publisher in northwest Arkansas told the Northwest Arkansas Business Journal in October, "The fundamentals of the newspaper business are changing rapidly and there is no space for profit in competing daily newspapers in a single market."

Projections at the time were appropriately grim for the two companies' nearly 550 area employees: About 40 percent of them, sources said, would eventually lose their jobs in the merger. If you can't beat 'em, the old saying goes, join 'em - then maybe get canned.



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