Justice Department concludes investigation into newspaper merger

By: Bill Bowden
Published: Monday, October 26, 2009
Clockwise from top-left: Jeff Jeffus, a vice president with the Arkansas Democrat-Gazette Inc., will continue to run the Democrat-Gazette operations in addition to being president of the new company; Rusty Turner, editor of The Morning News, will continue in that role, but his duties will expand to include the papers other than the Northwest edition of the Arkansas Democrat-Gazette; Susan Scantlin will remain editor of the Northwest edition of the Arkansas Democrat-Gazette; Tom Stallbaumer, publisher of The Morning News, will remain publisher for all the daily and weekly newspapers except for the Northwest edition of the Arkansas Democrat-Gazette.
Clockwise from top-left: Jeff Jeffus, a vice president with the Arkansas Democrat-Gazette Inc., will continue to run the Democrat-Gazette operations in addition to being president of the new company; Rusty Turner, editor of The Morning News, will continue in that role, but his duties will expand to include the papers other than the Northwest edition of the Arkansas Democrat-Gazette; Susan Scantlin will remain editor of the Northwest edition of the Arkansas Democrat-Gazette; Tom Stallbaumer, publisher of The Morning News, will remain publisher for all the daily and weekly newspapers except for the Northwest edition of the Arkansas Democrat-Gazette.

— The merger of the two largest newspaper operations in Northwest Arkansas will be completed Sunday.

The U.S. Department of Justice has closed its investigation of the joint venture between Stephens Media LLC and the Arkansas Democrat-Gazette Inc., finding no antitrust violations.

The merger was announced Sept. 3.

The Morning News was put up for sale, but no buyer came forward, so the Justice Department has allowed the merger to take place. Both companies will have an equal financial interest in the company, which will merge the Arkansas Democrat-Gazette’s operations in Northwest Arkansas and The Morning News into Northwest Arkansas Newspapers LLC.

Beginning Sunday, The Morning News will be circulated with the Democrat-Gazette primarily in Springdale and Rogers, where it will be zoned as a local edition (or two, depending on the day) for each of those cities. It will be wrapped around the Democrat-Gazette similar to the way the Northwest Arkansas Times and Benton County Daily Record are circulated now in Washington and Benton counties, respectively.

Jeff Jeffus, president of the new Northwest Arkansas Newspapers, said the merger will result in four distinctly separate local newspaper editions covering Fayetteville, Springdale, Rogers and Bentonville. All of those sections will be circulated with the Democrat-Gazette, which will provide regional, state, national and international coverage.

Under the Worker Adjustment and Retraining Notification Act, letters were delivered Monday to all staff at the merged companies, telling them their jobs will be eliminated on or about Oct. 31. An unspecified number of those employees will be immediately hired by Northwest Arkansas Newspapers.

Tom Stallbaumer, publisher of The Morning News and Northwest Arkansas Newspapers, said all staff members who aren’t hired by the new company should be notified of that decision by Saturday.

Staff who aren’t hired by Northwest Arkansas Newspapers will be paid severance based on the amount they normally earn in a two-month period. Some employees will be paid more severance, depending on how long they have worked for the newspapers. Some employees may be asked to work during that time. Others won't.

Arkansas Democrat-Gazette Inc. has 369 employees in Northwest Arkansas, including 101 who are part time. Stephens Media has 188 full- and part-time employees in Northwest Arkansas.

The Morning News and the Arkansas Democrat-Gazette’s Northwest Arkansas publications have been losing money in a heated battle primarily for advertising revenue. Newspapers nationwide have been suffering because of the recession and competition from the Internet.

Both companies have lost millions of dollars over the past few years, Jeffus said.

“I think this is in the best interests of both companies, and our readers and advertisers, too,” Jeffus said. "We were both losing millions of dollars. You had to have a model that would succeed.”

The Morning News is Stephens’ flagship newspaper in Northwest Arkansas. Other Stephens publications that are part of the merger include two weekly newspapers in Washington County, a weekly in McDonald County, Mo., a Spanish language weekly and Hawgs Illustrated, a monthly magazine that covers Arkansas Razorbacks athletics.

Arkansas Democrat-Gazette Inc. properties involved in the merger include the Northwest Arkansas Times in Fayetteville, the Benton County Daily Record in Bentonville, a twice-weekly newspaper, nine weekly publications in Benton and Washington counties and the Northwest edition of the Democrat-Gazette zoned for the 12 counties of Northwest Arkansas.

Under the plan, Stephens Media is responsible for editorial control of all publications except for the Northwest Arkansas edition of the Democrat-Gazette, which focuses on regional coverage and will remain under the statewide Democrat-Gazette. Both Stephens Media and the Arkansas Democrat-Gazette will share coverage of the Arkansas Razorbacks.

The Democrat-Gazette will also control advertising, business, production and circulation for the existing Stephens Media publications in Northwest Arkansas involved in the merger.

Read tomorrow's Arkansas Democrat-Gazette for full details. Thank you for coming to the Web site of the Arkansas Democrat-Gazette. We're working to keep you informed with the latest breaking news.

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