Walter E. Hussman Jr. is determined to save the Arkansas Democrat-Gazette, one iPad at a time

Posted

Walter E. Hussman Jr. is banking on technology to save the Arkansas Democrat-Gazette.

The newspaper publisher has bought thousands of iPads to give to subscribers in parts of the state who no longer receive print editions of the Democrat-Gazette. Some of those subscribers still receive the printed edition of the Sunday newspaper.

The efforts come as Hussman is being celebrated Thursday as the Arkansan of the Year by Easterseals Arkansas. And Hussman is celebrating the 200th anniversary of the Arkansas Gazette.

"Basically, I've devoted most of my life to publishing a newspaper in this town," Hussman, 72, says. "I think that society and our democracy are going to be so impeded if we don't have newspapers."

Hussman points to recent local front page stories. "Who is going to cover things like that if there's not a newspaper?"

The cost of printing a newspaper, loading it on trucks, delivering it all over the state and paying carriers to deliver it to homes is expensive. And many local retailers who are struggling to compete against online giants such as Amazon can't afford to advertise.

Another "deadly blow" is the decline in pre-printed circulars that started about 18 months ago. The profit margin is higher on the circulars, he says.

So Hussman is sending out teams of newspaper employees to different areas of the state to show subscribers how to use an iPad to read a digital replica of the print edition.

"We lost money last year. We are going to lose more money this year because this one-on-one [iPad instruction] is expensive," he says. "But, if we can convert people, we are going to be profitable again in 2020. That's our hope."

Hussman needs to convert about 70 percent of his print subscribers to digital subscribers to make his plan succeed. Those subscribers would need to pay at or near the full subscription rate.

"If we can get pretty close to our full rate, we don't have to cut a dollar out of the newsroom. We don't have to cut staff. We don't have to cut any news hole. We can expand the news hole because it won't cost one penny in newsprint." Hussman is referring to the amount of space on a page for the news.

He has been on the road with his staff, speaking to civic clubs about why the Democrat-Gazette needs to convert subscribers. He takes a visual example – the Feb. 6, 2018, print editions of the Democrat-Gazette and the Raleigh News and Observer. The Democrat-Gazette had 36 pages within six sections. The Raleigh paper had only 20 pages in two sections.

"I don't want to publish a paper like that, and I don't think you want to read a paper like that," he says.

The Sunday print edition of the Democrat-Gazette is still profitable and provides about 40 percent of the paper's advertising. The rest of the week, the paper loses money, he says.

The Daily Oklahoman recently sold for $12 million, Hussman says – about the same amount he says he is investing in the Democrat-Gazette.

"The print model is not going to make it for newspapers. I don't care what town you are in in America," he says.

But he doesn't anticipate other newspapers making the same investment.

"No one is going to copy what I am doing because no one has enough confidence in the future of the newspaper business to make that kind of investment."

The weekday print edition could "conceivably" come to an end in central Arkansas, he says. He hopes to always continue printing a Sunday edition.

"It could happen," he says. "The economics are a little better in central Arkansas than they are out in the state, but you know we tweak this thing and tweak this thing. ... We are in unexplored territory. No one has ever done this. I don't have the answer. We are going to do what works."

Paul Smith has been with Hussman since the early days. He retired in 2013 as president of WEHCO Newspapers, the Democrat-Gazette's parent company.

"Walter is not doing this just for the money. He is doing it because he loves the newspaper business and he wants to put out a good newspaper. ... If anybody can do it, Walter Hussman can," Smith says.

Edward VanHorn, executive director of the Southern Newspaper Publishers Association in Atlanta, called Hussman "a visionary with proven insights about what it takes to run a successful newspaper."

"Digital delivery of newspaper content has many advantages," VanHorn says. "Stories that are not confined to print can be more up-to-date, more visual, interactive and accessible whether readers are at home or away. Readers can make the type larger and easier to read.

"There is lots of information on the Internet, but it's hard to know what is really accurate. Trustworthy journalism from a newspaper like the Arkansas Democrat-Gazette is reliable and credible, and that is a critical distinction."

FAMILY HISTORY IN NEWSPAPERS

Both sides of Hussman's family have been deeply involved in the newspaper business for decades. Walter Hussman Sr. grew up in a working-class section of St. Louis, the son of German immigrants. He dropped out of high school and went to work in the Kansas wheat fields. He eventually went back to high school, graduating when he was 21.

He and his future wife, Betty Palmer of Texarkana, met while both were studying journalism at the University of Missouri. His roommate and fraternity brother was Donald W. Reynolds, who became a media entrepreneur and created in his lifetime one of the nation's largest privately held media companies, the Donrey Media Group.

Betty's father was Clyde Palmer, owner of newspapers in Texarkana, Hot Springs, El Dorado, Camden, Magnolia and Hope. Betty and Walter Hussman Sr. married in 1931. He sold insurance for a while before working for his father-in-law.

The Hussmans had two daughters, Gale and Marilyn, before Hussman Sr. went to serve in World War II. He was sent to Paris, where he and Reynolds were co-publishers of Yank magazine.

"He came home from the war, and I was a war baby," Hussman Jr. says. Gale is 12 years older; Marilyn is 8 years older.

After Hussman Sr. returned home, he realized that, while he loved the newspaper business, he didn't like working for his father-in-law. He found a newspaper for sale in Midland, Texas, and people in Texarkana who were willing to invest.

Clyde Palmer didn't like the idea of his daughter and grandchildren moving to Texas and offered to sell Hussman Sr. the Camden News. With it, the Hussmans would have 100 percent ownership. Hussman Jr. was 2 years old when his family moved to Camden.

The Hussmans took their son on many childhood trips. One trip is still on his mind: He and his father stopped for ice cream in south Arkansas. They stood in line behind one white and two black field workers. The white man ordered three Brown Derbies. The ice cream salesman turned him down, saying he didn't serve black people.

"Dad grew up in St. Louis. He didn't grow up in the South. He said, 'I want three Brown Derbies.' He was going to buy it and give it to the other guys and the man said, 'I am not going to sell it to you. You are going to give it to the other guys.'"

"My dad looked at me and said, 'Come on. We are getting out of here.' It made a big impression."

Hussman Jr. started working for his father at age 10, inserting papers on Saturday mornings. He made 25 cents an hour and remembers when he earned his first dollar. He spent part of it on a cheeseburger and fries at a greasy spoon in Camden.

EAST COAST BOARDING SCHOOL

When Hussman Jr. was in the eighth grade, his parents took him on an eight-week trip to Europe. He missed the last quarter of the school year. When he returned, he worked with a tutor to study for final exams. He made A's on all of his tests, but the school didn't think it was right for him to miss so much school and make straight A's. He was given a C in English for missing school.

Feeling guilty about the missed school, his parents sent him to summer school at Phillips Exeter Academy, a prestigious boarding school in New Hampshire. When he returned to Camden, his school would not accept his Exeter course credits and he wouldn't be allowed to take Latin because he needed a B or better in English.

His father thought the situation was ridiculous and tried to enroll him in Exeter. There was not room, so Hussman Jr. was sent to the Lawrenceville School, a boarding school in New Jersey. After graduating, he chose the University of North Carolina at Chapel Hill because he wanted to return to the South and study journalism.

He became heavily involved in his fraternity, Delta Kappa Epsilon, serving two years as social chairman, and "we were having a really good time." One of his professors got on to him about skipping classes.

"He said, 'I understand. You don't need to worry about it. You can get out of Carolina and you can go work for your daddy's newspaper. You can probably hang out at the 19th hole and drink after playing golf, and you can probably coast for the rest of your life. You don't really need to worry about it.'"

"Wow. I think I knew what he was doing. He was putting a big burr right under my saddle," Hussman says. "It made me think that is not what I want to do the rest of my life."

After he flunked a physical exam and did not have to go to Vietnam, Hussman applied to Columbia University in New York. "Everyone was shocked I got into Columbia."

After earning an Master of Business Administration, Hussman took a job as a reporter at Forbes magazine. He loved living and working in New York but his dad didn't have anyone to take over the Camden News.

"He said, 'If you come back to Arkansas and you try the family business and you don't like it, you can always go back to New York and get another job. But if you stay up here and work as a writer and we sell the business, that option is gone.'"

Hussman Jr. decided to give it a try. In Camden he found "every girl is married by the time they graduate from high school." Hussman had to drive to Little Rock to get a date.

His father threw projects his way including figuring out how to build a cable TV system in Vicksburg, Miss. When the Camden News general manager was caught stealing, Hussman Jr. was made acting general manager until he found a permanent replacement.

Business was booming, and Hussman Jr. decided he needed an airplane to quickly get to ventures in Vicksburg, Shreveport and Longview, Texas.

"When we bought this airplane, all of the people in town got upset. 'They must be charging us too much for our advertising in the Camden News.' So we had an advertising boycott."

He and Paul Smith worked together to end the boycott. First they decided to print the Camden paper in El Dorado to save costs. Then they put together a 32-page football section that made money. Up until that point, Hussman says, he thought his heart was with the reporting side of journalism.

"I started to realize this is actually fun. This is actually exciting and actually this takes some creativity. All of a sudden this epiphany hit me. Good grief I didn't realize business ... could be that creative when you got down and did it yourself."

ARKANSAS DEMOCRAT

In 1973, his father told him the Arkansas Democrat was for sale. At that time, the Arkansas Gazette – a morning paper – had a daily circulation of about 118,000, and the Arkansas Democrat – an afternoon paper – of about 60,000. The Sunday editions were about 130,000 for the Gazette and 90,000 for the Democrat.

"My dad said, 'The Gazette is a good newspaper; it puts out a good product. It's not the jazziest looking paper in the world, but it is solid. They've got good reporting, comprehensive coverage. It's really going to be tough to compete against them.'

"I was real enthusiastic about it because I saw the Democrat as a turn-around opportunity," Hussman Jr. says. "When I was in business school, the most exciting thing you learned about was going in and taking a struggling business and turn it around."

Hussman Jr. assigned Smith to interview advertisers. Smith found that advertisers were satisfied running their ads in the Gazette.

"Despite all of that, our company bought it." The sale was finalized March 15, 1974, and Hussman Jr. was named publisher and moved to Little Rock. The company paid $3.7 million for it, with $500,000 of that in cash and a 20 year, 7 percent note for the balance of $3.2 million, with interest and principal paid annually.

In 1977, Hussman approached the Gazette about a joint-operating agreement under federal law designed to preserve failing newspapers, but was turned down. By the end of that year, the Democrat's subscribers had nosedived and the Gazette's subscriber list had grown.

Hussman and his father decided the Democrat would need to compete to survive. The newspaper expanded its news sections, doubled its staff and discounted advertisement rates. In 1978, it began offering free classified ads.

In 1979, the Democrat became a morning newspaper and went head-to-head with the Gazette. Readership dramatically increased and the Democrat became the nation's fastest-growing newspaper in 1980.

In 1984, the Gazette filed an antitrust lawsuit against the Democrat contending the owners and others conspired to monopolize the newspaper market in Little Rock. In 1986, a ruling came down in favor of the Democrat. Before the year was over, the Gazette was sold to the Gannett Co.

Gannett ownership lasted five years before Gannett shut down the Gazette on Oct. 18, 1991, and sold the assets to Little Rock Newspapers Inc. The next day, Hussman Jr. published the Arkansas Democrat-Gazette.

In 2013, Nat Lea was promoted to president of Arkansas Democrat-Gazette, Inc. He is now president and CEO of WEHCO Media.

"He is really running the company and I am doing what I set out to do when I returned to Arkansas at age 23; and that is be more involved in editorials and the news side," Hussman says.

A FAMILY OF FIVE

A few years before buying the Democrat, Hussman went to a New Year's Eve party in Memphis with friends including Fred Smith, founder of Federal Express. At the party, he met Robena "Ben" Kendrick, an Ole Miss grad who was working at a Memphis bank. They hit it off and married 11 months later in November 1975.

A few years after they married, the Hussmans were still trying to have children and decided to adopt. They heard about the Gladney Center for Adoption in Fort Worth and applied. After not getting anywhere with the process, they decided to drive to Fort Worth and "just walk in and introduce ourselves."

In November 1983, the Hussmans flew to Dallas to look for an apartment for his parents. His usually punctual sister, Marilyn, was supposed to pick them up at the airport but was late. When she arrived, she had Hussman's parents in the car – along with pink and blue balloons.

When Gladney was unable to get the Hussmans on the phone, the agency had called other numbers on file. A baby had arrived.

"They had pink and blue balloons in the car because they didn't know if it was a boy or a girl."

It was a boy. Palmer Hussman was just 8 days old.

"They gave him to us in a Christmas stocking. When we got back to Little Rock, we put him down under the tree in that Christmas stocking with all of the presents," he says. "Then we started calling neighbors to come over to see us. They would sit there and finally say, 'What's that?'"

Gladney advises parents to consider adopting a second child. When asked if the Hussmans would consider twins, Walter immediately said "yes." Ben gave it more thought but also agreed.

In 1987, Ben was in Dallas and Walter was at home with Palmer when the phone call came. Twin girls. And not just twins – mirror identical twins – Eliza is right-handed; Olivia is left-handed. Both girls have almost straight teeth but Eliza's front tooth is slightly crooked to the right and Olivia's is slightly crooked to the left.

Palmer now has children of his own. His son Thad, 8, is from his first marriage. Nora, also 8, is the daughter of his second wife, Sharon. Palmer and Sharon also have a son, Ari, 5. Palmer oversees special projects and community relations for Hussman's companies and the Hussman Foundation.

Eliza Hussman Gaines and her husband, Alec, have three children. Their son Holden is 4. Mary Helen is 2 and baby Hamilton was born last year. Eliza followed in her father's footsteps, first working as a reporter for the travel section at the San Francisco Chronicle.

After obtaining a master's degree in journalism, she returned to Little Rock, where she served as assistant publisher of the Democrat-Gazette. She also served a year as editor of the Hot Springs Sentinel Record. She is now WEHCO vice president of audience development at the Democrat-Gazette and the company's other newspapers.

Olivia Hussman Ramsey and her husband, Joe, are the parents of two children: Wright, 2, and Anna Katherine, 1. She was a teacher for several years at eStem Public Charter School. She is now a stay-at-home mom.

"I never dreamed that would happen," Hussman says of all of his family living in Little Rock. "Consider how lucky I am. We couldn't have children, and now we have three great kids. We've got eight grandkids, and they all live in Little Rock. Unbelievable."

Now he just needs to find a way to save the family business for future generations – one of only a few family owned newspapers left.

"I was eating a Chinese fortune cookie, and I looked at the fortune, and it said, 'Courage is the determination to proceed when the outcome is uncertain.' So that's where we are right now. We've got a lot of courage and keeping our fingers crossed."

Comments

No comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment