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Stephens Interest in Newspapers Waning

6 min read

(This article has been edited for clarity. See end for details.)

Little Rock’s Stephens family has been in the newspaper business for two decades, but the family’s interest in the most traditional news medium appears to be waning.

Stephens Media, the newspaper chain jointly owned by Warren Stephens and his cousins, Witt Stephens Jr. and Elizabeth Stephens Campbell, has been downsizing since a new CEO arrived last December. And last month, the Florida-based newspaper chain that Warren Stephens helped start in 2010 was sold in a $280 million deal that will close early next year.

Warren Stephens — who in 2012 told Arkansas Business that he was “a believer that local news … is going to be of value to people and therefore of value to advertisers” even though the days of easy newspaper profits were “way over” — declined to be interviewed about the future of Stephens Media or about the sale of Halifax Media to New Media Investment Group.

In fact, no one still employed by Stephens Media would comment. Mark Hinueber, vice president and general counsel for the company, which is headquartered in Las Vegas, declined to be interviewed. Byron Tate, publisher of the Pine Bluff Commercial and Stephens Media’s community papers in Arkansas, didn’t return repeated phone calls.

Stephens Media was known as Donrey Media before and for almost a decade after the Stephens family — then headed by Warren’s father, Jack Stephens — acquired the multimedia company from the estate of founder Donald W. Reynolds in mid-1993. At the time it included 53 daily papers, 71 non-dailies, a TV station and 11 outdoor advertising companies.

In a reflection of the decline of the newspaper industry over the past 20 years, Stephens Media now owns 11 dailies and 64 other publications. In Arkansas, Stephens continues to own the Commercial, the Southwest Times Record in Fort Smith and 15 non-daily papers. Stephens Media is also part of a joint venture with the Arkansas Democrat-Gazette’s owner, Wehco Media, called Northwest Arkansas Newspapers LLC.

Within the past year — since Ed Moss was named CEO of Stephens Media in November 2013 — the company has laid off dozens of reporters, editors and printing staff in Arkansas and sold papers in Hawaii and Washington. (The Honolulu Star-Advertiser was the first known newspaper investment by the Stephens family, dating from 1993, a few months before the Donrey purchase.)

Many of the staff layoffs — 37 total — came when the printing and mailroom operations were moved out of the Times Record building. The company also shed several columnists, and the Times Record building in downtown Fort Smith has been listed for sale.

On the horizon could be additional cost-cutting in the form of fewer staff and putting more newspapers on the market as the company continues to focus on the bottom line, said Mary Jackson Pitts, a multimedia journalism professor at Arkansas State University.

Pitts said Stephens Media’s approach to its papers seems simple: It treats them as a business and cuts employees even when it might impact the quality of reporting.

“There’s an appearance that they’re cutting just for the sake of that bottom line, because when you cut somebody that’s been working for 30-something years, you’re cutting a wealth of history there that goes along with that reporting and [an] understanding of the local communities,” Pitts said.

Staff Cut ‘to the Nubbins’

Kitty Chism, the former owner of The Times of North Little Rock and the Maumelle Monitor, which Stephens Media bought in 2005, said she saw the company’s cost-cutting firsthand.

Chism said she and her late husband, Dave, turned the “modest little paper” into an award-winning publication, but that maintaining a quality product required money. She said when Stephens took over, the staff was cut “to the nubbins.”

The paper went from winning more than 20 Arkansas Press Association awards in 2004, including one for general excellence, to four in 2011 and none in 2012.

“If you cut the staff and you cut the editors, cut the reporters, cut the photographers, you won’t have the same quality. I think it was harmed by those moves,” Chism said.

Chism said she didn’t know if the decision to reduce staff was made by Stephens Media or the local publisher. But she said she hoped the company would reinvest in the paper to boost its quality.

In May, Stephens Media let go of three reporters and three other employees working for its community newspapers in central Arkansas. The cuts left two reporters to provide content for the weekly publications that serve North Little Rock, Maumelle, Sherwood, Cabot, Lonoke and Carlisle.

“I think there’s a sad thing that’s happening to newspapers, period. Stephens papers — most papers throughout the state are really struggling — and they have the same problem. They feel like they have to cut their staff until they can’t do it anymore,” Chism said.

In October 2005, the Maumelle Monitor reported paid circulation of 3,200 and The Times of North Little Rock reported more than 8,000. Less than a year later, under the new ownership of Stephens Media, those numbers dropped to 2,536 and 5,971.

According to a 2011-12 informational brochure for advertising in the company’s newspapers, The Times and Monitor then had a combined circulation of 6,987. The company reported its nine central Arkansas newspapers had a combined circulation of 28,347.

At the beginning of March, the company also shut down the Arkansas News Bureau, which provided state government news to all of the Stephens Newspapers and several client newspapers. Five employees were laid off, leaving only one reporter in central Arkansas, John Lyon, to cover state government news under the Arkansas News Bureau name. (One of the bureau reporters laid off was Rob Moritz, husband of Arkansas Business Editor Gwen Moritz.)

Dennis Byrd, who served as bureau chief from 1996 until being among those laid off, said he had a largely positive experience working for Stephens Media despite being let go a few months before his planned retirement.

Byrd said he was a little surprised by the timing of the layoffs, but that they weren’t completely unexpected. “We all know that newspapers are generally not doing as well as maybe they did in the past.”

Byrd said he didn’t have an opinion about what direction the company was headed.

Hoyt Purvis, a journalism professor at the University of Arkansas, said the changes at Stephens Media were not significantly different than those occurring at companies in other states. (Purvis writes a column for Northwest Arkansas Newspapers LLC, the joint venture between Stephens Media and Wehco Media.)

“It just seems to me to be part of the larger trend, particularly when it comes to print media, that they are consolidating and downsizing. With few exceptions, this is a national trend,” Purvis said.

Purvis added that many community papers, which make up the bulk of Stephens Media’s holdings, are “more or less holding their own,” compared with regional and broader-based publications that are seeing more competition online. He said it was difficult to gauge how the company would proceed in the coming years, but that buyers could emerge who want to purchase Stephens Media’s papers.

Tom Larimer, executive director of the Arkansas Press Association, agreed that Stephens Media has “had their challenges just like every newspaper holding company,” but added that some papers are improving. “Speaking to newspapers, it’s still not all hot tubs and champagne, but it’s much better than it was five years ago,” Larimer said.

The Halifax Sale

Halifax Media, headquartered in Daytona, Florida, is a completely separate newspaper chain from Stephens Media. Warren Stephens, through Stephens Capital Partners, is believed to own a controlling interest in the company, while the cousins who co-own Stephens Media don’t appear to be investors.

Warren Stephens began his investment in the company through Stephens Capital Partners in 2010. That year the company bought the Daytona Beach News-Journal for $20 million.

In January 2012, Halifax bought 16 newspapers from The New York Times Co. for $143 million and then purchased 20 more from Freedom Communications six months later. The financial details of the second purchase were not disclosed and three of those papers were later sold off.

Earlier this year, Halifax announced the purchase of the Telegram & Gazette of Worcester, Massachusetts, from John Henry, owner of the Boston Red Sox and the Boston Globe. The purchase price was estimated to be between $7 million and $15 million.

The Halifax that is being sold to New Media for $230 million comprises 36 newspapers, none in Arkansas.

(Clarification, Dec. 4, 2014: This article originally omitted the fact that one Arkansas News Bureau reporter continues to cover state government news in central Arkansas.)

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