After suffering "significant financial losses during the current economic recession," the Arkansas Democrat-Gazette and Stephens Media plan a joint venture in northwest Arkansas, the news organizations announced Thursday.
The joint venture would move forward if Stephens can't find a buyer for its flagship Arkansas newspaper, The Morning News. But Democrat-Gazette Publisher Walter Hussman says he doesn't believe a buyer will be found.
"If someone comes along and buys it, then we’ll continue to compete with The Morning News and this merger won’t be consummated," Hussman, CEO of Wehco Media Inc., which owns the Democrat-Gazette, said in his newspaper's coverage of the deal. "We suspect that won’t happen."
Both companies have asked the U.S. Department of Justice to evaluate the deal. The Justice Department had requested that Stephens put The Morning News up for sale, the companies said.
In absence of a sale, the two firms plan to establish a joint venture, called NorthwestArkansas Newspapers LLC, according to a news release available on Stephens' ArkansasNews.com. The organization 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."
Jeff Jeffus, publisher for the Democrat-Gazette's northwest Arkansas operations, will be president of the new LLC, the companies said.
If the deal goes through, it would end more than a decade of competition in the region between two of the state's biggest media companies and wealthiest Arkansans, Hussman and financier Warren Stephens, who owns Stephens Media.
In northwest Arkansas, the Democrat-Gazette owns the Northwest Arkansas Times and the Benton County Daily Record. It also publishes a zoned edition of the Democrat-Gazette for 12 counties in the region.
Stephens Media owns The Morning News and several other newspapers in the region. It also owns several papers in central Arkansas, including the Times of North Little Rock, the Cabot Star-Herald, Carlisle Independent, Lonoke Democrat, Sherwood Voice and the Jacksonville Patriot.