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Hussman's other newspapers.

Hussman's Other Newspapers

Five South Arkansas Dailies Gross $20 Million While Democrat Loses Big Bucks

"When you say you work for Walter Hussman, people say, |Oh, you're really a profit-oriented paper,'" says Eddie Telford, vice president and general manager of Palmer Newspapers.

Palmer is a chain of south Arkansas newspapers owned by Arkansas Democrat Publisher Walter Hussman Jr.

"My response is, |Who's not?'" Telford says.

Hussman's Democrat has lost an estimated $100 million since 1978 in a war with Arkansas' other statewide daily, the Arkansas Gazette.

But his five other dailies -- The Sentinel-Record at Hot Springs, the Texarkana Gazette, the El Dorado News-Times, the Magnolia Banner-News, and the Camden News -- are making money.

Lots of it, according to some.

While the Democrat gets the ink, the five smaller dailies make the bucks.

They are helping subsidize the Democrat's massive losses.

Even Hussman's two weeklies -- the Stephens Star and the Smackover Journal -- are profitable.

Clyde Palmer, Hussman's grandfather, purchased his first newspaper in 1909. Palmer, a shrewd businessman, built a print and broadcast media empire, Palmer Media Group, which he passed on to his son-in-law, Walter Hussman Sr.

The elder Hussman renamed the company WEHCO Media Inc. -- an acronym for Walter E. Hussman Co. -- and made Palmer Newspapers a subsidiary.

Although Walter Hussman Jr. devotes the biggest part of his time to the Democrat, he still keeps in weekly, if not daily, contact with Telford and the other newspapers.

"He can't go on vacation without his fax machine," Telford says.

Hussman was on vacation in Wyoming last week but called Telford daily and fielded a reporter's questions from a pay phone.

"Walter is a lot like his dad," Telford says. "He likes to keep up with what's going on in this industry. He likes to be on the cutting edge."

Even though Hussman gives Telford and the individual papers autonomy, his interest in the newspaper industry affects their editorial content and business operations.

The final product is very much a reflection of the man.

That Hometown Feel

How good are the Palmer papers?

Editorial quality varies from town to town.

Hussman says the five Palmer dailies are not replicas of each other.

A random look at Magnolia's Banner-News, circulation 4,500, found the lead story to be the first of a five-part series about Miss Arkansas contestants from Magnolia, complete with a blurred photo. There's also a story on the second annual Purplehull Pea Festival.

The Camden News, circulation 5,300, featured a murder story on the front page.

The El Dorado News-Times, circulation 11,000, is one of the better looking Palmer papers with clear photos and a dash of color. The morning El Dorado newspaper leads its front page more often with state and national stories than do the afternoon newspapers in Magnolia and Camden.

The Sentinel-Record and the Texarkana Gazette, with circulations of 18,000 and 33,000, respectively, boast plenty of color and graphics. And they give more space to state, national and international news.

But the main reason people read Walter Hussman Jr.'s smaller dailies is to get local news.

"We had our finger on the pulse of the community better than some local papers," says Mark Chapel, who was a night editor at The Sentinel-Record more than 15 years ago and today is a journalism instructor at Garland County Community College.

Chapel points out that the Hot Springs newspaper now includes more business coverage. It previously devoted more space to entertainment news. The change led to mixed reactions from the always sensitive business community.

One Texarkana Gazette reader says, "Don't bother calling the business people. They all think the paper's great because there's no competition."

The only direct print competition is found in shoppers such as the Thrifty Nickel at Texarkana.

Some business people will speak out, though.

Dr. Gerald Fisher, president of Garland County Community College, has had a stormy relationship with the local press.

Fisher says even though the newspaper has taken a "jaundiced view" of some of his actions, "I look over that. I know full well you can't get what you want in the paper unless you own it."

Fisher says stories often appear on the front page that seem out of place. He also talks about editors he says haven't always been professional.

Unlike Fisher, most business leaders in south Arkansas won't go on record as saying anything negative about Hussman's newspapers because they fear retribution.

"You don't fight with a pig," says one Hot Springs businessman.

He says if he were retired and independently wealthy, he might allow his name to be used. For now, though, he fears the power of the pen.

"I feel The Sentinel-Record takes on issues that can be sensationalized," he says. "Whenever there's a controversial issue that doesn't represent the majority of the community, it's sensationalized."

He points to the recent story about Ross E. Beck Jr., the Texarkana school superintendent, who was caught having oral sex with another man on the Grand Promenade, a walkway behind Hot Springs' Bathhouse Row.

The newspaper reported that rangers caught Beck "in the act of receiving a blow job, as the citation stated."

Some readers found the terminology offensive and the story not worthy of front-page coverage.

Wallace Ballentine, the veteran general manager at The Sentinel-Record, sent a memo to his staff about the poor use of words.

Ballentine says, "We're not out for sensationalism. We're going to report the news. We're not out to make it."

Hussman agrees.

"Our papers are many things, but sensational isn't one of them," he says.

With about 80 percent of the Palmer newspapers' revenues coming from advertising, Hussman says sensationalism merely increases street sales. And street sales don't generate much revenue in small towns.

Making Money

What does add up is advertising.

Hussman's five south Arkansas dailies are known for small news holes and lots of advertising. Ads often appear on the front pages of sections.

The 1970s and early 1980s were good years for the Palmer newspapers. New shopping centers were opening and providing additional revenue.

Since 1985, Hussman's smaller newspapers have been hurt, partly because of the success of Arkansas-based Wal-Mart Stores Inc.

Wal-Mart has eliminated competition in small towns such as Camden and Magnolia, taking ad revenue from local newspapers in the process.

When there were competiting discount stores -- Magic Mart, Howard's, Gibson's, etc. -- discount advertising sometimes ranged from 8,000 to 9,000 inches per month. With only Wal-Mart still in business, there are sometimes as few as 500 to 1,000 inches of discount advertising per month.

Still, Eddie Telford says, "In the 1987 crash, when folks were committing suicide, our company had 3 percent growth."

A 1989 Arkansas Business article estimated annual revenues from the five Palmer dailies at $19.4 million.

Last year, Hussman says, the El Dorado News-Times had one of its best years despite the depressed south Arkansas economy. He says his Hot Springs and Texarkana newspapers also had respectable earnings.

"My five daily papers were all above the year before," Telford says. "I hope I'm able to say that for this year."

"Smaller papers swim upstream," Hussman says.

He's not planning to buy any in the near future.

"I wouldn't rule out buying a paper, but this isn't a real good environment," he says.

Hussman has faced criticism for using profits from his smaller newspapers to cover losses at the Democrat.

"He's a businessman, and you don't tell a businessman how to spend his profits," Telford says of his boss.

Telford adds, "In the early days, there was some resentment from subscribers and advertisers. We don't have a problem with that today."

South Arkansas advertisers worried that local rate increases would be used to keep the Democrat alive. In the past five years, the number of complaints has decreased due to Hussman's highly publicized successes with the Democrat's. circulation.

In a 1986 antitrust case brought by the Gazette against the Democrat, Hussman testified that to a certain extent, he was subsidizing Democrat losses through his other newspapers. But he claimed he was not hurting the Palmer newspapers.

He said advertising revenues were 20 percent higher at the Palmer papers than at comparable newspapers across the country, but advertising rates were lower than normal.

Operating expenses also were lower than normal. Anyone in the newspaper industry will tell you that Walter Hussman Jr. runs a tight ship.

Hussman, however, points to purchases such as a $3.5-million press at Texarkana in 1985.

Hussman says the WEHCO profit-sharing program, even with Democrat losses, has more than $15 million in it.

"I'm sure our profits would have been higher had the Democrat been making money," he says. "But we still make tremendous contributions."

Growing Up

Billy Ray McKelvy, a former editor at the Camden News, recalls an "awkward triangle" for printing three of the Palmer dailies.

El Dorado's press was used to print the News-Times along with the Camden and Magnolia newspapers. Hussman's two weekly newspapers also were printed at El Dorado.

"That was a real headache," says McKelvy, the editor of the De Queen Daily Citizen and the De Queen Bee. "It was hard being editor. You didn't really have a lot of control over what the final product looked like."

"Editors got real frustrated in those years," Telford admits.

Stories would be sent from Magnolia and Camden to El Dorado and never make it into the newspapers. Ads couldn't always be checked.

Telford says the process has changed. New IBM computer terminals and Apple laserwriters allow ads to be built and proofed at the same location.

A new pagination system is being tested at El Dorado. The system will eliminate the need for a composing department.

There have been other advances, according to Palmer officials.

Ballentine says, "We listen to the public more these days."

James Williamson, editor of the weekly Little River News at Ashdown, says the Palmer newspapers often were home to opportunistic reporters who wrote to be recognized so they could move to larger newspapers.

"It was as if they didn't even attend the same meetings I attended," Williamson says. "That hurt people locally."

Hussman and others claim steps have been taken to keep quality journalists at the Palmer newspapers.

Bob Lutgen, a former managing editor at the Texarkana Gazette and currently assistant managing editor at the Democrat, says there was a rehabilitation period in the early 1980s.

He gives credit to Hussman for increasing salaries to end the tradition of frequent staff turnover.

Palmer reporters were sometimes offered even more than Democrat reporters, who traditionally have been poorly paid.

"In 1978 and 1979, there was not much an editor could be proud of," Lutgen says. "But the money helped and new leadership helped until the staff had to be cut in 1987 due to financially difficult times."

Palmer employees still complain about low salaries, though.

McKelvy simply says, "The company was not known for being overly generous."

And poorly paid reporters and editors are not the recipe for quality editorial products.

A south Arkansas journalism professor says he uses one of the newspapers in his classes as "an example of what not to do."

But the Palmer papers are making money for Walter Hussman Jr.

And that's the bottom line.

PHOTO : MAKING MONEY DOWN SOUTH: When people think of Walter Hussman Jr., they usually think of the Arkansas Democrat. But Hussman also owns five daily newspapers in south Arkansas that help subsidize the Democrat's losses.

PHOTO : THE FLAGSHIP: The Arkansas Democrat is the largest newspaper owned by Walter Hussman Jr., but it loses money. Hussman's five other dailies all make money.

PHOTO : LURED IN: Although Clyde Palmer had to convince his son-in-law, Walter Hussman Sr., to join him in the newspaper business, Hussman eventually became every bit the media mogul Palmer was.

PHOTO : AT THE HELM: Eddie Telford has been with Palmer Newspapers for 21 years.

Carrie Rengers Arkansas Business Staff
COPYRIGHT 1991 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:includes related article on Clyde Palmer; publisher Walter Hussman Jr.
Author:Rengers, Carrie
Publication:Arkansas Business
Article Type:Biography
Date:Jul 15, 1991
Previous Article:Drillers look for gas in the West, oil in the South.
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