Northwest Arkansas newspapers propose joint venture

FAYETTEVILLE — Owners of the two major newspapers in Northwest Arkansas are considering a merger that would produce one comprehensive print news package for the area.

Stephens Media LLC and Arkansas Democrat-Gazette Inc. have asked the U.S. Department of Justice to review a proposed joint venture in which both companies would have an equal financial interest.

Stephens Media owns The Morning News and several weekly publications in Benton and Washington counties and in Missouri. The Arkansas Democrat-Gazette Inc. owns the Northwest Arkansas Times, the Benton County Daily Record and an edition of the Democrat-Gazette zoned for the 12 counties of Northwest Arkansas.

But first, at the request of the Justice Department, Stephens Media must put The Morning News up for sale.

"If someone comes along and buys it, then we'll continue to compete with The Morning News and this merger won't be consummated," said Walter Hussman, chief executive of Wehco Media Inc., which owns the Arkansas Democrat-Gazette. "We suspect that won't happen."

If a buyer for The Morning News doesn't come forth, the merger can take place. Under the agreement, a limited liability company would be formed to be called NorthwestArkansas Newspapers LLC. Stephens Media will be responsible for editorial control of the local newspapers in Northwest Arkansas. The Democrat-Gazette will control advertising, business, production and circulation, as well as the editorial functions of the Northwest Arkansas edition of that newspaper.

"The newspapers will still remain separate entities," Hussman told a group of about 80 employees gathered at the Northwest Arkansas Times building Thursday.

"It's a tough thing," he said, "because we like to compete, and this is sort of the end to the economic competition."

Times Publisher Jeff Jeffus will be president of the new company.

Hussman said newsrooms will compete to a degree, but the Democrat-Gazette will focus on regional coverage in its Northwest Arkansas section while the other newspapers cover local news in each city. The Morning News would be circulated in Springdale and Rogers, wrapped around the daily Democrat-Gazette, similar to the way the Northwest Arkansas Times and Daily Record are now circulated in Fayetteville and Bentonville, respectively.

"It's a pretty unique formula in America," Hussman said of the distribution method currently used for the Fayetteville and Bentonville newspapers.

Hussman said the recession has resulted in newspapers closing, particularly in cities that had two newspapers. But in some cases, such as Ann Arbor, Mich., a city was left without a daily newspaper.

"The recession is so severe, and the economic downturn is so significant," he said. "A lot of towns are struggling to support a single newspaper right now. ... Our responsibility is to make sure this economy can support one newspaper. We need to make sure there's always a newspaper for Fayetteville, Springdale, Rogers and Bentonville."

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