War costs more than $100 million.
Between 1974 and 1978, Walter Hussman formulated a plan to turn the Democrat into the only surviving newspaper in Little Rock. The plan included:
* converting the Democrat from an evening to a morning newspaper;
* promotional campaigns to boost the Democrat's circulation;
* hiring more staff, including employees of the Gazette and, most importantly;
* selective advertising rate discounting.
The cost of the Hussman plan was enormous. Court documents show the Democrat's cost - as measured by the newspaper's operating losses - equaled $42 million through 1984 and have escalated to about $100 million today.
Experts in the financial performance of newspapers doubt whether these losses can ever be recouped through future profits earned if and when the Democrat becomes the only paper in town. In the absence of sound business decision, the only other explanation for these losses is a desire for power, prestige and status.
Profits from other investments cover the Democrat's losses. Hussman's parent company owns newspapers in Camden, Hot Spring, Texarkana, Magnolia and El Dorado; four radio stations, a television company and 17 CATV companies.
These monopoly-market newspapers are extremely profitable and return on investment earned by owners of newspapers usually exceeds the return on businesses like banks, funeral parlors and telephone companies.
The Democrat's aggressive, competitive tactics finally took their toll on the Gazette, and the paper was sold to the Gannett newspaper chain for $51 million in 1986. Since Gannett's purchase, the Gazette's financial condition to deteriorate.
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|Title Annotation:||Arkansas newspaper wars|
|Author:||Pickett, John C.|
|Date:||Dec 17, 1990|
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