The Hearst Corporation

views updated May 29 2018

The Hearst Corporation

959 Eighth Avenue
New York, New York 10019
U.S.A.
(212) 649-2000
Fax: (212) 765-3528

Private Company
Incorporated: 1943
Employees: 14,000
Sales: $2.10 billion

The Hearst Corporation is a modem communications empire whose interests stretch from newspapers to publishing to broadcasting. The company’s history spans more than a century, during which Hearst papers, led by their founder, played a significant role in the history of the United States.

The shape and history of the company’s early years were intertwined with the history and designs of its founder, William Randolph Hearst. A man who inherited enormous wealth, Hearst was also a person of enormous ambition and activity, whose initial interest in journalism in an era when the newspaper business could hardly be separated from the political arena led to a consuming passion for political office that was destined to end in frustration.

The company that became a behemoth in communications started out as payment for a gambling debt, when William Randolph Hearst’s father, George Hearst, a self-made millionaire who had earned his fortune in mining and ranching, took possession of the San Francisco Examiner in 1880 after its owner had lost a wager with him. Seven years later, William Randolph Hearst, recently expelled from Harvard College for an elaborate prank, took over the paper he desired to run.

Newspapers in that day were, for the most part, organs of propaganda for individual politicians and political parties. Indeed, Hearst’s father had accepted the paper only for the purpose of enhancing his own political career. William Randolph Hearst had big plans in mind for the money-losing four-page daily paper. Taking Joseph Pulitzer’s New York World as his model, he began by sinking large sums into the latest printing technology, and changing the paper’s appearance to make it more compelling. In addition, he hired new staff members-bagging such luminaries as Ambrose Bierce—and charged them with the aggressive pursuit of stories that would improve the paper’s circulation. The first big coup came with the Examiner’s sensational coverage of a big hotel fire, just one month after Hearst took over. Slowly the paper’s fortunes improved, helped along by a large dose of self-promotion. Hearst was shortly to crown his paper “A GREAT PAPER.”

Hearst employees were diligent in their pursuit of shocking and titillating material to draw in more readers. In the absence of genuinely sensational news, they did not hesitate to manufacture newsworthy events, or simply make things up. Much of the manufactured news was billed as crusading exposure of social ills, as when a woman reporter feigned illness to expose the condition of the city’s ambulance corps and hospital, or when one intrepid Hearst journalist threw himself into San Francisco Bay from a ferry to test rescue procedures. Both of these stories did in fact result in improvements in the city agencies involved. In his first year, Hearst launched more than a dozen crusades, taking on such established powers as the city’s political machine and the Southern Pacific Railroad. All of this activity, along with Hearst features such as the publication of the scores of popular songs on Sunday and the introduction of a column devoted to union activities, added up to a new kind of journalism and contributed to a slowly growing circulation. Advertising revenues remained low, however, and Hearst’s paper continued to consume large sums of his father’s money until 1890, when it first went into the black.

By 1895 the Examiner was thriving, both in terms of circulation and revenue, and Hearst was ready for a new challenge. He found it in New York, taking over a decrepit daily paper, the New York Journal. He began by sending for the best of his San Francisco staff, dropping the price of the New York paper to 1c, and increasing its size. Hearst was going after his old ideal, Pulitzer’s World, and his most successful tactic, was the wholesale raiding of Pulitzer’s staff. Waving enormous salaries, he lured some of his rival’s best staff away, including the creator of the popular comic “The Yellow Kid,” which would inspire the phrase “yellow journalism,” used to describe the sensational and irresponsible coverage that Hearst and his rivals pioneered.

In the ensuing contest between the two papers, the techniques that Hearst’s organization had first polished in San Francisco—sensationalism and crusading campaigns on behalf of the ordinary person—were taken to new heights. In addition, the paper became inextricably involved with political parties, power, and disputes, becoming heavily identified with presidential candidate William Jennings Bryan and the Democratic Party. Since all the other large newspapers backed William McKinley, the Journal rapidly became the leading Democratic newspaper in the country.

Perhaps the ultimate manufactured news event was the one that started the Spanish-American War. From the start, Hearst’s paper had strongly supported Cuban independence from Spain. When the American battleship Maine mysteriously blew up in Havana harbor in February 1898, Hearst and his employees printed two weeks’ worth of fraudulent material blaming Spain for the attack. This coverage, which Hearst orchestrated but in which he was not alone, resulted in increased circulation for the paper, and in war.

With the dawning of the new century, Hearst’s fledgling network of newspapers continued to expand. Attempting to bolster support for Bryan’s 1900 presidential bid, Hearst founded the Chicago American, whose first issue rolled off the presses on July 4, 1900. Bryan lost once again to McKinley. Hearst’s overwhelming identification in the public’s mind with opposition to the president became a grave liability after McKinley was assasinated in September 1901. Some groups boycotted and banned Hearst papers. Nevertheless, his New York paper, the Journal, claimed the greatest number of paid subscribers in the world by the end of the year. When Hearst was elected to Congress the following year, his papers became his personal forum for conducting political activity. In 1904 the Boston American was added to the fold. Two years later, the 1906 San Francisco earthquake dealt a major blow to the flagship of the Hearst organization, reducing the physical plant of the Examiner to a ruin. Despite the devastation, the three San Francisco papers produced a joint issue on the first day after the quake, and shortly thereafter, the Examiner was back on its feet.

The Hearst organization branched out into magazines in 1903, with the founding of Motor magazine, a venture inspired by The Car, a British publication Hearst had come across on his honeymoon. Two years later, he bought Cosmopolitan, a magazine of fiction and nonfiction. Filled with the work of some of the best writers of the day, its circulation soon doubled. Hearst’s most important magazine acquisition was Good Housekeeping in 1911.This purchase also included the laboratory facilities that would develop into the Good Housekeeping Institute and the Good Housekeeping Seal, heavily promoted under the new owners.

Hearst papers took a vigorous anti-British and isolationist stance in the era leading up to the United States’s entry into World War I, bannering slogans like “America First” and “No Entangling Alliances” in fierce opposition to the policies of President Woodrow Wilson. When the United States declared war in April 1917, Hearst’s opposition to the U.S. effort to aid the Allies, and perceived pro-German sentiment, resulted in lower circulation for his newspapers in many cities. Throughout this era, William Randolph Hearst continued his political activities in pursuit of the presidency, and Hearst papers were instruments in his crusade.

Nevertheless, throughout the second decade of the century, Hearst enterprises grew at a prodigious pace. By 1920 the print operations numbered 13 newspapers and 7 magazines, including the profitable American Weekly newspaper insert and the British Nash’s. As offshoots of the newspapers, the organization also owned a money-losing newswire, the International News Service, which had emerged from World War I with its credibility badly damaged, and the King Features Syndicate, which sold the work of Hearst writers and artists to other papers.

In addition, Hearst had entered the film industry in 1913, when the first newsreel—footage of Woodrow Wilson’s inauguration—was shown in movie theaters. This showing led to the establishment of the Hearst-Selig News Pictorial in 1914, which pioneered film journalism throughout the 1920s evolving into Hearst Metrotone News with the arrival of sound in 1929. For entertainment, Hearst produced in partnership with Pathé Fréres such long-running serials as The Perils of Pauline. Intent both on promoting the career of his mistress, Marion Davies, and becoming a movie mogul himself, William Randolph Hearst formed Cosmopolitan Productions and in 1919 built a studio in Harlem where movies could be filmed. Hearst papers duly praised the resulting products. In time, the studio moved to Hollywood where it joined with other studios, producing musical extravaganzas like Broadway Melody, and other films.

As William Randolph Hearst continued to seek political office in the 1920s, Hearst operations continued to grow. Papers were acquired or founded at a brisk pace, including three in 1921, six in 1922, one in 1923, and three in 1924. On the international front, Hearst expanded its magazine holdings in Britain to include Good Housekeeping, Connoisseur, and Harper’s Bazaar.

By the early 1930s the tally of Hearst papers was up to 28, and the magazines numbered 13. Along with his other ventures, this necessarily gave Hearst great influence in public affairs. His influence was enhanced by the Hearst company’s entry into the fledgling radio industry in 1928 with the purchase of WISN in Milwaukee, Wisconsin. By the mid-1930s it owned ten radio stations. In 1934, the Hearst organization was restructured to give Hearst editorial control while trusted subordinates handled day-to-day business matters. By the following year Hearst had become implacable in his opposition to the policies of Franklin Delano Roosevelt whom he had initially helped to win the Democratic nomination in 1932. In the 1936 campaign Hearst papers supported Roosevelt’s opponent Alf Landon. Throughout the 1930s, Hearst papers were unstinting in their opposition to socialism and communism. This fact combined with Hearst’s love for Germany, where he traveled often, and his growing conservatism, often led his opponents to charge him with fascism.

Throughout the years of financial turmoil and decline that began with the stock market crash in 1929, Hearst, who was accustomed to wealth of unimaginable proportions, had not significantly altered his activities. He continued to spend lavishly on art and on the construction and upkeep of his several estates. In addition, the company had used several bond issues to raise capital, resulting in debts that reached $137 million. In 1937 under pressure from the shareholders, and various banks and newsprint companies to whom Hearst owed money, the company tried to float another set of debentures, but was prevented from doing so by the Securities and Exchange Commission. The crash had come. Faced with the virtual bankruptcy of his vast empire, Hearst, now nearly 75 years old, turned over complete financial control of his holdings to a lawyer approved by his creditors, who quickly began to restructure drastically the Hearst organization. Six money-losing newspapers and seven radio stations were sold, a magazine was scrapped, and Hearst’s New York flagship paper, the New York American, was merged with its evening counterpart. A Conservation Committee was formed to sell off assets including two-thirds of Hearst’s art collection.

Four years later in 1941, the Hearst organization was still fighting for fiscal survival. By now, there were 94 Hearst entities with complex financial ties. With the U.S.’s entry into World War II, Hearst papers—by now reduced to 18—dropped their isolationist stance and wholeheartedly supported the war effort. It was the war, opposed so staunchly by Hearst editorialists, that helped the company to regain its financial health, as the war sent circulation and advertising revenues rising.

At the end of 1943 the trustee and the Conservation Committee appointed in 1937 were succeeded by a voting trust that included two of Hearst’s five sons. The trust continued to sell off property, including two-thirds of Hearst’s vast San Simeon estate, and to rearrange assets, in 1943 consolidating everything within The Hearst Corporation holding company. By the end of the war in 1945, the company was on more solid financial ground once again. Three years later, the company entered a new field in communications when WBAL-TV in Baltimore, Maryland, began to broadcast.

By 1947 William Randolph Hearst had reached the age of 84 and had suffered a heart attack, and his involvement in the company was waning. On August 14, 1951, Hearst died, ending an era in U.S. journalism. His will stipulated that his $57 million estate be divided for tax purposes into a charitable trust and a restructured corporation. Hearst left the 100 shares of voting stock that controlled the company in the hands of a board made up of five family members and six company executives, insuring that those outside the family would have control of the corporation. One of the executives, Richard Berlin, took over as chief executive officer at Hearst’s death, after 32 years with the company.

During Berlin’s tenure, the company saw the collapse of its first base of operations, its newspapers, and expanded its holdings in other fields of the communications industry, such as magazines and television. The advent of television ended newspaper journalism as William Randolph Hearst had known it. No longer did the papers provide the public’s primary source of news. This change in social habits resulted in a vast shake-out in the newspaper industry, in which afternoon papers in particular were hard hit, the Hearst publications included. The first paper to go was the Chicago American, a long-time money-loser, which was sold to its competitor, the Tribune, in 1956. Two years later, the Hearst news wire, International NewsService, and its affiliated photo service were sold to rival United Press. Under Berlin’s direction the company shed papers in San Francisco, Pittsburgh, Detroit, Boston, Los Angeles, and Milwaukee in quick succession. In 1963 Hearst sold its money-losing morning tabloid the New York Mirror, which had the second-largest circulation in the United States. The crudest blow came in 1966, when Hearst’s flagship Journal-American folded in New York.

In contrast, Hearst expanded its magazine operations through out this period, concentrating on special interest publications rather than broad, general interest titles. In 1953 the company purchased Sports Afield and five years later added another men’s magazine, Popular Mechanics. Shortly thereafter, a Spanish edition of the magazine was granted the first license for a Hearst magazine foreign edition. Eventually, the company would successfully license nearly 60 foreign editions of its publications. In 1959 the company branched out into book publishing when it purchased Avon Publications, Inc., which produced paperbacks. In addition to new acquisitions, old publications underwent renovations, enabling them to contribute strong performances to the magazine group. Cosmopolitan, for instance, retooled in 1965 from a general interest magazine of fiction and nonfiction to the interests of working women and became a huge money-maker. In 1966 another venerable Hearst magazine, Good Housekeeping, became the leader in its field.

At his retirement in 1973, Berlin left Hearst debt-free and rich in capital, yet far poorer in publications and importance than it had once been. The following year the company was again restructured when it used the cash built up during Berlin’s tenure to buy back the stock held by Hearst charitable foundations, which had been established at Hearst’s death to avoid inheritance taxes. The Hearst family regained control of the company’s assets, now privately owned, and the chain of command within the company was simplified. Throughout the second half of the 1970s under the leadership of John R. Miller, Hearst experienced a huge growth in profits, as properties that had been allowed to lie dormant began to produce. For instance, the company tapped the reserve of goodwill built up in the names House Beautiful and Good Housekeeping when it successfully spun off Colonial Homes and Country Living from the older publications.

In 1979 Hearst again began to expand its newspaper holdings by buying five daily papers in mid-sized cities in Michigan, Texas, and Illinois. In the early 1980s acquisitions continued until the newspaper group was 15 strong, with publications in Houston, Seattle, Los Angeles, and San Francisco, as well as other, smaller cities.

By the start of the 1980s, the Hearst magazine division was the largest U.S. producer of monthly magazines. It continued to perform well throughout the 1980s, adding Redbook, Esquire, a U.S. version of the British Connoisseur, and other titles. The Hearst magazine distribution network, which already included three subscriber services, purchased a fourth, Communications Data Services, Inc., in 1982.

During the 1980s the company’s scope shifted beyond print to encompass the whole spectrum of communications enterprises. Under the leadership of Frank A. Bennack Jr., who took over as chief executive officer in 1979, Hearst expanded its broadcast division to include six TV stations and seven radio stations. The company entered the cable television industry in 1980, joining with other partners in ventures such as the Arts & Entertainment Network and LIFETIME, a network devoted to programming for women. In late 1990 the company bought a one-fifth share in the sports network ESPN.

The Hearst Corporation had thus evolved from a newspaper chain known for sensationalism and irresponsible journalism, and dominated by the will of one man, to a vast and highly profitable enterprise encompassing a broad range of communications fields. As it entered the 1990s, the company appeared to be firmly positioned to use its resources for further growth.

The Hearst Corporation

views updated Jun 11 2018

The Hearst Corporation

959 Eighth Avenue
New York, New York 10019
U.S.A.
(212) 649-2000
Fax: (212) 765-3528
Web site: http://www.hearstcorp.com

Private Company
Incorporated: 1943
Employees: 14,000
Sales: $2.51 billion (1995)
SICs: 2711 Newspaper Publishing & Printing; 2721 Magazine Publishing Only, Not Printed Onsite; 2731 Books Publishing Only; 4832 Radio Broadcasting Stations; 4833 Television Broadcasting Stations; 7383 News Feature Syndicate

The Hearst Corporation is one of the largest diversified communications companies in the world. It has interests in print, broadcasting, and the news media, including newspapers, magazines, book and business publishing, television and radio broadcasting, cable network programming, newspaper features distribution, television production and distribution, and electronic publishing. Hearst Magazines is the largest publisher of monthly magazines in the world, with distribution in more than 100 countries. A subsidiary, the National Magazine Company Limited, is one of the leading magazine publishers in the United Kingdom. Hearst Newspapers publishes 12 daily and seven weekly newspapers in the United States. Its division, Associated Publishing Company, which was acquired in 1993, publishes yellow-page telephone directories listing information for West Texas communities.

Hearst Broadcasting is one of the largest independently owned broadcasting groups in the nation; it includes nine television stations and six radio stations. Hearst Broadcasting Productions is a television and corporate video production unit. This unit is also a partner with Continental Cablevision in New England Cable News, a 24-hour all-news network. Hearst Entertainment and Syndication includes the company’s cable network partnerships with ABC, NBC, and ESPN; television programming and distribution activities; and the King Features group of syndication companies, which is the world’s largest distributor of editorial features, comic strips, and panels to newspapers.

Hearst Books/Business Publishing includes William Morrow & Company, which publishes hardcover books, and Avon Books, which publishes paperbacks. This unit also publishes business publications and database catalogs. Hearst New Media & Technology, created in 1993, works with all other company divisions to adapt editorial and programming content to new media technologies. This division also has an interest in Netscape Communications, the software provider on the Internet.

Founder William Randolph Hearst

The shape and history of the company’s early years were intertwined with the history and designs of its founder, William Randolph Hearst. A man who inherited enormous wealth, Hearst was also a person of enormous ambition and activity, whose initial interest in journalism in an era when the newspaper business could hardly be separated from the political arena led to a consuming passion for political office that was destined to end in frustration.

The company that became a behemoth in communications started out as payment for a gambling debt, when William Randolph Hearst’s father, George Hearst, a self-made millionaire who had earned his fortune in mining and ranching, took possession of the San Francisco Examiner in 1880 after its owner had lost a wager with him. Seven years later, William Randolph Hearst, recently expelled from Harvard College for an elaborate prank, took over the paper he desired to run.

Newspapers in that day were, for the most part, organs of propaganda for individual politicians and political parties. Indeed, Hearst’s father had accepted the paper only for the purpose of enhancing his own political career. William Randolph Hearst had big plans in mind for the money-losing four-page daily paper. Taking Joseph Pulitzer’s New York World as his model, he began by sinking large sums into the latest printing technology and changing the paper’s appearance to make it more compelling. In addition, he hired new staff members—bagging such luminaries as Ambrose Bierce—and charged them with the aggressive pursuit of stories that would improve the paper’s circulation. The first big coup came with the Examiner’s sensational coverage of a big hotel fire, just one month after Hearst took over. Slowly the paper’s fortunes improved, helped along by a large dose of self-promotion. Hearst was soon referring to his paper as “A GREAT PAPER.”

Hearst employees were diligent in their pursuit of shocking and titillating material to draw in more readers. In the absence of genuinely sensational news, they did not hesitate to manufacture newsworthy events, or simply to make things up. Much of the manufactured news was billed as crusading exposure of social ills, as when a woman reporter feigned illness to expose the condition of the city’s ambulance corps and hospital, or when one intrepid Hearst journalist threw himself into San Francisco Bay from a ferry to test rescue procedures. Both of these stories did in fact result in improvements in the city agencies involved. In his first year, Hearst launched more than a dozen crusades, taking on such established powers as the city’s political machine and the Southern Pacific Railroad. All of this activity, along with Hearst features such as the publication of the scores of popular songs on Sunday and the introduction of a column devoted to union activities, added up to a new kind of journalism and contributed to a slowly growing circulation. Advertising revenues remained low, however, and Hearst’s paper continued to consume large sums of his father’s money until 1890, when it first went into the black.

By 1895 the Examiner was thriving, both in terms of circulation and revenue, and Hearst was ready for a new challenge. He found it in New York, taking over a decrepit daily paper, the New York Journal. He began by sending for the best of his San Francisco staff, dropping the price of the New York paper to 10, and increasing its size. Hearst was going after his old ideal, Pulitzer’s World, and his most successful tactic was the wholesale raiding of Pulitzer’s staff. Waving enormous salaries, he lured some of his rival’s best staff away, including the creator of the popular comic “The Yellow Kid,” which would inspire the phrase “yellow journalism,” used to describe the sensational and irresponsible coverage that Hearst and his rivals pioneered.

In the ensuing contest between the two papers, the techniques that Hearst’s organization had first polished in San Francisco—sensationalism and crusading campaigns on behalf of the ordinary person—were taken to new heights. In addition, the paper became inextricably involved with political parties, power, and disputes, becoming heavily identified with presidential candidate William Jennings Bryan and the Democratic Party. Since all the other large newspapers backed William McKinley, the Journal rapidly became the leading Democratic newspaper in the country.

Perhaps the ultimate manufactured news event was the one that started the Spanish-American War. From the start, Hearst’s paper had strongly supported Cuban independence from Spain. When the American battleship Maine mysteriously blew up in Havana harbor in February 1898, Hearst and his employees printed two weeks’ worth of fraudulent material blaming Spain for the attack. This coverage, which Hearst orchestrated but in which he was not alone, resulted in increased circulation for the paper—and in war.

With the dawning of the new century, Hearst’s fledgling network of newspapers continued to expand. Attempting to bolster support for Bryan’s 1900 presidential bid, Hearst founded the Chicago American, whose first issue rolled off the presses on July 4, 1900. Bryan lost once again to McKinley. Hearst’s overwhelming identification in the public’s mind with opposition to the president became a grave liability after McKinley was assassinated in September 1901. Some groups boycotted and banned Hearst papers. Nevertheless, his New York paper, the Journal, claimed the greatest number of paid subscribers in the world by the end of the year. When Hearst was elected to Congress the following year, his papers became his personal forum for conducting political activity. In 1904 the Boston American was added to the fold. Two years later, the 1906 San Francisco earthquake dealt a major blow to the flagship of the Hearst organization, reducing the physical plant of the Examiner to a ruin. Despite the devastation, the three San Francisco papers produced a joint issue on the first day after the quake and, shortly thereafter, the Examiner was back on its feet.

The Hearst organization branched out into magazines in 1903, with the founding of Motor magazine, a venture inspired by The Car, a British publication Hearst had come across on his honeymoon. Two years later, he bought Cosmopolitan, a magazine of fiction and nonfiction. Filled with the work of some of the best writers of the day, its circulation soon doubled. Hearst’s most important magazine acquisition was Good Housekeeping in 1911. This purchase also included the laboratory facilities that would develop into the Good Housekeeping Institute and the Good Housekeeping Seal, heavily promoted under the new owners.

Hearst papers took a vigorous anti-British and isolationist stance in the era leading up to the United States’s entry into World War I, bannering slogans like “America First” and “No Entangling Alliances” in fierce opposition to the policies of President Woodrow Wilson. When the United States declared war in April 1917, Hearst’s opposition to the U.S. effort to aid the Allies and perceived pro-German sentiment, resulted in lower circulation for his newspapers in many cities. Throughout this era, William Randolph Hearst continued his political activities in pursuit of the presidency, and Hearst papers were instruments in his crusade.

Company Perspectives:

“Each day, more than 14,000 people are at work at Hearst, helping to inform, educate, entertain, and inspire millions of readers, viewers, and listeners in virtually every area of communications. Although the company has expanded dramatically in recent years, the principle on which it was founded remains the same—a commitment to excellence.”

Nevertheless, throughout the second decade of the century, Hearst enterprises grew at a prodigious pace. By 1920 the print operations numbered 13 newspapers and seven magazines, including the profitable American Weekly newspaper insert and the British Nash’s. As offshoots of the newspapers, the organization also owned a money-losing newswire, the International

News Service, which had emerged from World War I with its credibility badly damaged, and the King Features Syndicate, which sold the work of Hearst writers and artists to other papers.

In addition, Hearst had entered the film industry in 1913, when the first newsreel—footage of Woodrow Wilson’s inauguration—was shown in movie theaters. This showing led to the establishment of the Hearst-Selig News Pictorial in 1914, which pioneered film journalism throughout the 1920s, evolving into Hearst Metrotone News with the arrival of sound in 1929. For entertainment, Hearst produced in partnership with Pathé Fréres such long-running serials as The Perils of Pauline. Intent both on promoting the career of his mistress, Marion Davies, and becoming a movie mogul himself, William Randolph Hearst formed Cosmopolitan Productions and in 1919 built a studio in Harlem where movies could be filmed. Hearst papers duly praised the resulting products. In time, the studio moved to Hollywood where it joined with other studios, producing musical extravaganzas like Broadway Melody, and other films.

As William Randolph Hearst continued to seek political office in the 1920s, Hearst operations continued to grow. Papers were acquired or founded at a brisk pace, including three in 1921, six in 1922, one in 1923, and three in 1924. On the international front, Hearst expanded its magazine holdings in Britain to include Good Housekeeping, Connoisseur, and Harper’s Bazaar. By the early 1930s the tally of Hearst papers was up to 28 and the magazines numbered 13. Along with his other ventures, this necessarily gave Hearst great influence in public affairs. His influence was enhanced by the Hearst company’s entry into the fledgling radio industry in 1928 with the purchase of WISN in Milwaukee, Wisconsin. By the mid-1930s it owned ten radio stations. In 1934, the Hearst organization was restructured to give Hearst editorial control while trusted subordinates handled day-to-day business matters. By the following year Hearst had become implacable in his opposition to the policies of Franklin Delano Roosevelt whom he had initially helped to win the Democratic nomination in 1932. In the 1936 campaign Hearst papers supported Roosevelt’s opponent Alf Landon. Throughout the 1930s, Hearst papers were unstinting in their opposition to socialism and communism. This fact, combined with Hearst’s love for Germany, where he traveled often, and his growing conservatism, often led his opponents to charge him with fascism.

Repercussions of the Great Depression

Throughout the years of financial turmoil and decline that began with the stock market crash in 1929, Hearst, who was accustomed to wealth of unimaginable proportions, had not significantly altered his activities. He continued to spend lavishly on art and on the construction and upkeep of his several estates. In addition, the company had used several bond issues to raise capital, resulting in debts that reached $137 million. In 1937 under pressure from the shareholders, and various banks and newsprint companies to whom Hearst owed money, the company tried to float another set of debentures, but was prevented from doing so by the Securities and Exchange Commission. The crash had come. Faced with the virtual bankruptcy of his vast empire, Hearst, now nearly 75 years old, turned over complete financial control of his holdings to a lawyer approved by his creditors, who quickly began to restructure drastically the Hearst organization. Six money-losing newspapers and seven radio stations were sold, a magazine was scrapped, and Hearst’s New York flagship paper, the New York American, was merged with its evening counterpart. A Conservation Committee was formed to sell off assets, including two-thirds of Hearst’s art collection.

Four years later, in 1941, the Hearst organization was still fighting for fiscal survival. By that time there were 94 Hearst entities with complex financial ties. With the entry of the United States into World War II, Hearst papers (reduced to a total of 18) dropped their isolationist stance and wholeheartedly supported the war effort. It was the war, opposed so staunchly by Hearst editorialists, that helped the company to regain its financial health, as the war sent circulation and advertising revenues rising.

At the end of 1943 the trustee and the Conservation Committee appointed in 1937 were succeeded by a voting trust that included two of Hearst’s five sons. The trust continued to sell off property, including two-thirds of Hearst’s vast San Simeon estate, and to rearrange assets, in 1943 consolidating everything within The Hearst Corporation holding company. By the end of the war in 1945, the company was on more solid financial ground once again. Three years later, the company entered a new field in communications when WBAL-TV in Baltimore, Maryland, began to broadcast.

New Leadership in the Postwar Period

By 1947 William Randolph Hearst, elderly and suffering from heart problems, had little involvement in company operations. On August 14, 1951, Hearst died, ending an era in U.S. journalism. His will stipulated that his $57 million estate be divided for tax purposes into a charitable trust and a restructured corporation. Hearst left the 100 shares of voting stock that controlled the company in the hands of a board made up of five family members and six company executives, insuring that those outside the family would have control of the corporation. One of the executives, Richard Berlin, took over as chief executive officer at Hearst’s death, after 32 years with the company.

During Berlin’s tenure, the company saw the collapse of its first base of operations, its newspapers, and expanded its holdings in other fields of the communications industry, such as magazines and television. The advent of television ended newspaper journalism as William Randolph Hearst had known it. No longer did the papers provide the public’s primary source of news. This change in social habits resulted in a vast shake-out in the newspaper industry, in which afternoon papers in particular were hard hit, the Hearst publications included. The first paper to go was the Chicago American, a long-time money-loser, which was sold to its competitor, the Tribune, in 1956. Two years later, the Hearst newswire, International News Service, and its affiliated photo service were sold to rival United Press. Under Berlin’s direction the company shed papers in San Francisco, Pittsburgh, Detroit, Boston, Los Angeles, and Milwaukee in quick succession. In 1963 Hearst sold its money-losing morning tabloid the New York Mirror, which had the second largest circulation in the United States. The crudest blow came in 1966, when Hearst’s flagship Journal-American folded in New York.

In contrast, Hearst expanded its magazine operations throughout this period, concentrating on special interest publications rather than broad, general interest titles. In 1953 the company purchased Sports Afield and five years later added another men’s magazine, Popular Mechanics. Shortly thereafter, a Spanish edition of the magazine was granted the first license for a Hearst magazine foreign edition. Eventually, the company would successfully license nearly 60 foreign editions of its publications. In 1959 the company branched out into book publishing when it purchased Avon Publications, Inc., which produced paperbacks. In addition to new acquisitions, old publications underwent renovations, enabling them to contribute strong performances to the magazine group. Cosmopolitan, for instance, retooled in 1965 from a general interest magazine of fiction and nonfiction to the interests of working women and became a huge money-maker. In 1966 another venerable Hearst magazine, Good Housekeeping, became the leader in its field.

At his retirement in 1973, Berlin left Hearst debt-free and rich in capital, yet far poorer in publications and importance than it had once been. The following year the company was again restructured when it used the cash built up during Berlin’s tenure to buy back the stock held by Hearst charitable foundations, which had been established at Hearst’s death to avoid inheritance taxes. The Hearst family regained control of the company’s assets, now privately owned, and the chain of command within the company was simplified. Throughout the second half of the 1970s under the leadership of John R. Miller, Hearst experienced a huge growth in profits, as properties that had been allowed to lie dormant began to produce. For instance, the company tapped the reserve of goodwill built up in the names House Beautiful and Good Housekeeping when it successfully spun off Colonial Homes and Country Living from the older publications.

New Ventures in the 1980s and 1990

In 1979 Hearst again began to expand its newspaper holdings by buying five daily papers in mid-sized cities in Michigan, Texas, and Illinois. In the early 1980s acquisitions continued until the newspaper group was 15 strong, with publications in Houston, Seattle, Los Angeles, and San Francisco, as well as other, smaller cities.

By the start of the 1980s, the Hearst magazine division was the largest U.S. producer of monthly magazines. It continued to perform well throughout the 1980s, adding Redbook, Esquire, a U.S. version of the British Connoisseur, and other titles. The Hearst magazine distribution network, which already included three subscriber services, purchased a fourth, Communications Data Services, Inc., in 1982.

During the 1980s the company’s scope shifted beyond print to encompass the whole spectrum of communications enterprises. Television and radio stations were acquired; and partnerships were formed to create the Arts & Entertainment Network (A&E) and LIFETIME, a network devoted to programming for women. In late 1990 the company bought a 20 percent interest in the sports network ESPN.

In 1995, A&E launched The History Channel, devoted to historical programming and viewed by more than 37 million households in the United States. Also that year, Hearst partnered New Century Network, a national network of local online newspaper services, with eight other newspaper publishers; the company ceased, however, its CD-Rom operations that were part of Hearst New Media & Technology. In 1997, A&E teamed up with Groupe AB of France to launch La Chaine Histoire, to offer French viewers French and international history programming drawn from the History Channel International’s program catalogue.

More joint ventures allowed Hearst to enter and expand into new markets. In 1997, the company announced that SmartMoney, its print magazine dealing with personal business and partnered with Dow Jones & Company, would have a new Web edition, called SmartMoney Interactive. The edition, paid by subscriptions, would have daily news coverage and features not provided in the print version. In 1997, Hearst opened another web site, HomeArts, which used some Hearst magazines as sources for lifestyle and home services marketing on the internet.

Print was still very much a main focus for Hearst, however. In 1997, the publisher signed up Dan Rather to write a once-a-week column dealing with national and international news, to be syndicated internationally by King Features. Another print effort was a joint venture with ESPN, which involved taking its content to create a new sports magazine to be called ESPN Magazine for a 1998 debut.

Broadcasting, too, remained a vital part of the company. In 1997, Hearst announced plans to merge its broadcasting division with Argyle Television Inc. of San Antonio. The new division, to be called Hearst-Argyle Television Inc., would be one of the largest independent television groups of network-affiliated stations in the nation.

The Hearst Corporation had thus evolved from a newspaper chain known for sensationalism and irresponsible journalism, and dominated by the will of one man, to a vast and highly profitable enterprise encompassing a broad range of communications fields. As it entered the 21st century, the company appeared to be firmly positioned to use its resources for further growth.

Principal Subsidiaries

The National Magazine Company Limited.

Principal Operating Units

Hearst Magazines; Hearst Newspapers; Hearst Broadcasting; Hearst Entertainment & Syndication; Hearst Books/Business Publishing; Hearst New Media & Technology; Hearst Real Estate.

The Hearst Corporation

views updated May 14 2018

The Hearst Corporation

959 Eighth Avenue
New York, New York 10019
U.S.A.
Telephone: (212) 649-2000
Fax: (212) 765-3528
Web site: http://www.hearstcorp.com

Private Company
Incorporated: 1943
Employees: 18,300
Sales: $3.4 billion (2000)
NAIC: 51111 Newspaper Publishers; 51112 Periodical Publishers; 51113 Book Publishers; 51114 Database and Directory Publishers; 51312 Television Broadcasters; 51321 Cable Networks; 51311 Radio Networks; 51411 News Syndicates

The Hearst Corporation is one of the largest diversified communications companies in the world. It has interests in print, broadcasting, and the news media, including newspapers, magazines, book and business publishing, television and radio broadcasting, cable network programming, newspaper features distribution, television production and distribution, and electronic publishing. Hearst Magazines is the largest publisher of monthly magazines in the world. It publishes 16 titles in the U.S., including Cosmopolitan, Esquire, House Beautiful, O, The Oprah Magazine, and Talk. The division also puts out over 100 international editions, with distribution in more than 100 countries. A subsidiary, the National Magazine Company Limited, is one of the leading magazine publishers in the United Kingdom. The magazine division also publishes books, with titles mostly tied to its periodicals in some way. Hearst Newspapers publishes 12 daily and 16 weekly newspapers in the United States. The division also operates a subsidiary company which publishes Yellow Pages directories in Texas and is part owner of an Internet-based classified advertising company.

Hearst-Argyle TV is one of the largest independently owned broadcasting groups in the nation. It includes 26 television stations and two radio stations. Its stations reach over 17 percent of all U.S. households. Hearst Entertainment and Syndication includes the company’s cable network partnerships with ABC, NBC, and ESPN; television programming and distribution activities; and the King Features group of syndication companies, which is the world’s largest distributor of editorial features, comic strips, and panels to newspapers. Other business units include Hearst Interactive Media, which operates partnerships in Internet-based services such as iVillage and Hire.com, and its Business Media unit. The business media division handles a variety of business-to-business publications as well as databases and on-line services such as a used car guide and a collision database.

Founder William Randolph Hearst

The shape and history of the company’s early years were intertwined with the history and designs of its founder, William Randolph Hearst. A man who inherited enormous wealth, Hearst was also a person of enormous ambition and activity whose initial interest in journalism in an era when the newspaper business could hardly be separated from the political arena led to a consuming passion for political office that was destined to end in frustration.

The company that became a behemoth in communications started out as payment for a gambling debt, when William Randolph Hearst’s father, George Hearst, a self-made millionaire who had earned his fortune in mining and ranching, took possession of the San Francisco Examiner in 1880 after its owner had lost a wager with him. Seven years later, William Randolph Hearst, recently expelled from Harvard College for an elaborate prank, took over the running of the paper.

Newspapers in that day were, for the most part, organs of propaganda for individual politicians and political parties. Indeed, Hearst’s father had accepted the paper only for the purpose of enhancing his own political career. William Randolph Hearst had big plans in mind for the money-losing four-page daily paper. Taking Joseph Pulitzer’s New York World as his model, he began by sinking large sums into the latest printing technology and changing the paper’s appearance to make it more compelling. In addition, he hired new staff members—bagging such luminaries as Ambrose Bierce—and charged them with the aggressive pursuit of stories that would improve the paper’s circulation. The first big coup came with the Examiner’s sensational coverage of a big hotel fire, just one month after Hearst took over. Slowly the paper’s fortunes improved, helped along by a large dose of self-promotion. Hearst was soon referring to his paper as “A GREAT PAPER.”

Hearst employees were diligent in their pursuit of shocking and titillating material to draw in more readers. In the absence of genuinely sensational news, they did not hesitate to manufacture newsworthy events, or simply to make things up. Much of the manufactured news was billed as crusading exposure of social ills, as when a woman reporter feigned illness to expose the condition of the city’s ambulance corps and hospital, or when one intrepid Hearst journalist threw himself into San Francisco Bay from a ferry to test rescue procedures. Both of these stories did in fact result in improvements in the city agencies involved. In his first year, Hearst launched more than a dozen crusades, taking on such established powers as the city’s political machine and the Southern Pacific Railroad. All of this activity, along with Hearst features, such as the publication of the scores of popular songs on Sunday and the introduction of a column devoted to union activities, added up to a new kind of journalism and contributed to a slowly growing circulation. Advertising revenues remained low, however, and Hearst’s paper continued to consume large sums of his father’s money until 1890, when it first went into the black.

By 1895, the Examiner was thriving, both in terms of circulation and revenue, and Hearst was ready for a new challenge. He found it in New York, taking over a decrepit daily paper, the New York Journal. He began by sending for the best of his San Francisco staff, dropping the price of the New York paper to a penny, and increasing its size. Hearst was going after his old ideal, Pulitzer’s World, and his most successful tactic was the wholesale raiding of Pulitzer’s staff. Waving enormous salaries, he lured some of his rival’s best staff away, including the creator of the popular comic “The Yellow Kid,” which would inspire the phrase “yellow journalism,” used to describe the sensational and irresponsible coverage that Hearst and his rivals pioneered.

In the ensuing contest between the two papers, the techniques that Hearst’s organization had first polished in San Francisco—sensationalism and crusading campaigns on behalf of the ordinary person—were taken to new heights. In addition, the paper became inextricably involved with political parties, power, and disputes, becoming heavily identified with presidential candidate William Jennings Bryan and the Democratic Party. Since all the other large newspapers backed William McKinley, the Journal rapidly became the leading Democratic newspaper in the country.

Perhaps the ultimate manufactured news event was the one that started the Spanish-American War. From the start, Hearst’s paper had strongly supported Cuban independence from Spain. When the American battleship Maine mysteriously blew up in Havana harbor in February 1898, Hearst and his employees printed two weeks’ worth of fraudulent material blaming Spain for the attack. This coverage, which Hearst orchestrated but in which he was not alone, resulted in increased circulation for the paper—and in war.

With the dawning of the new century, Hearst’s fledgling network of newspapers continued to expand. Attempting to bolster support for Bryan’s 1900 presidential bid, Hearst founded the Chicago American, whose first issue rolled off the presses on July 4, 1900. Bryan lost once again to McKinley. Hearst’s overwhelming identification in the public’s mind with opposition to the president became a grave liability after McKinley was assassinated in September 1901. Some groups boycotted and banned Hearst papers. Nevertheless, his New York paper, the Journal, claimed the greatest number of paid subscribers in the world by the end of the year. When Hearst was elected to Congress the following year, his papers became his personal forum for conducting political activity. In 1904, the Boston American was added to the fold. Two years later, the 1906 San Francisco earthquake dealt a major blow to the flagship of the Hearst organization, reducing the physical plant of the Examiner to a ruin. Despite the devastation, the three San Francisco papers produced a joint issue on the first day after the quake and, shortly thereafter, the Examiner was back on its feet.

The Hearst organization branched out into magazines in 1903, with the founding of Motor magazine, a venture inspired by The Car, a British publication Hearst had come across on his honeymoon. Two years later, he bought Cosmopolitan, a magazine of fiction and nonfiction. Filled with the work of some of the best writers of the day, its circulation soon doubled. Hearst’s most important magazine acquisition was Good Housekeeping in 1911. This purchase also included the laboratory facilities that would develop into the Good Housekeeping Institute and the Good Housekeeping Seal, heavily promoted under the new owners.

Hearst papers took a vigorous anti-British and isolationist stance in the era leading up to the United States’s entry into World War I, bannering slogans like “America First” and “No Entangling Alliances” in fierce opposition to the policies of President Woodrow Wilson. When the United States declared war in April 1917, Hearst’s opposition to the U.S. effort to aid the Allies and perceived pro-German sentiment resulted in lower circulation for his newspapers in many cities. Throughout this era, William Randolph Hearst continued his political activities in pursuit of the presidency, and Hearst papers were instruments in his crusade.

Company Perspectives:

Each day, more than 18,000 people are at work at Hearst, helping to inform, educate, entertain, and inspire millions of readers, viewers, and listeners in virtually every area of communications. Although the company has expanded dramatically in recent years, the principal on which it was founded remains the same—a commitment to excellence.

Nevertheless, throughout the second decade of the century, Hearst enterprises grew at a prodigious pace. By 1920, the print operations numbered 13 newspapers and seven magazines, including the profitable American Weekly newspaper insert and the British Nash’s. As offshoots of the newspapers, the organization also owned a money-losing newswire, the International News Service, which had emerged from World War I with its credibility badly damaged, and the King Features Syndicate, which sold the work of Hearst writers and artists to other papers.

In addition, Hearst had entered the film industry in 1913, when the first newsreel—footage of Woodrow Wilson’s inauguration—was shown in movie theaters. This showing led to the establishment of the Hearst-Selig News Pictorial in 1914, which pioneered film journalism throughout the 1920s, evolving into Hearst Metrotone News with the arrival of sound in 1929. For entertainment, Hearst produced in partnership with Pathé Fréres such long-running serials as The Perils of Pauline. Intent both on promoting the career of his mistress, Marion Davies, and becoming a movie mogul himself, William Randolph Hearst formed Cosmopolitan Productions and in 1919 built a studio in Harlem where movies could be filmed. Hearst papers duly praised the resulting products. In time, the studio moved to Hollywood where it joined with other studios, producing musical extravaganzas like Broadway Melody and other films.

As William Randolph Hearst continued to seek political office in the 1920s, Hearst operations continued to grow. Papers were acquired or founded at a brisk pace, including three in 1921, six in 1922, one in 1923, and three in 1924. On the international front, Hearst expanded its magazine holdings in Britain to include Good Housekeeping, Connoisseur, and Harper’s Bazaar. By the early 1930s, the tally of Hearst papers was up to 28 and the magazines numbered 13. Along with his other ventures, this necessarily gave Hearst great influence in public affairs. His influence was enhanced by the Hearst company’s entry into the fledgling radio industry in 1928 with the purchase of WISN in Milwaukee, Wisconsin. By the mid-1930s, it owned ten radio stations. In 1934, the Hearst organization was restructured to give Hearst editorial control while trusted subordinates handled day-to-day business matters. By the following year Hearst had become implacable in his opposition to the policies of Franklin Delano Roosevelt, whom he had initially helped win the Democratic nomination in 1932. In the 1936 campaign Hearst papers supported Roosevelt’s opponent Alf Landon. Throughout the 1930s, Hearst papers were unstinting in their opposition to socialism and communism. This fact, combined with Hearst’s love for Germany, where he traveled often, and his growing conservatism, often led his opponents to charge him with fascism.

Repercussions of the Great Depression

Throughout the years of financial turmoil and decline that began with the stock market crash in 1929, Hearst, who was accustomed to wealth of unimaginable proportions, had not significantly altered his activities. He continued to spend lavishly on art and on the construction and upkeep of his several estates. In addition, the company had used several bond issues to raise capital, resulting in debts that reached $137 million. In 1937, under pressure from the shareholders, as well as various banks and newsprint companies to whom Hearst owed money, the company tried to float another set of debentures, but was prevented from doing so by the Securities and Exchange Commission. The crash had come. Faced with the virtual bankruptcy of his vast empire, Hearst, now nearly 75 years old, turned over complete financial control of his holdings to a lawyer, one approved by his creditors, who quickly began to restructure drastically the Hearst organization. Six money-losing newspapers and seven radio stations were sold, a magazine was scrapped, and Hearst’s New York flagship paper, the New York American, was merged with its evening counterpart. A Conservation Committee was formed to sell off assets, including two-thirds of Hearst’s art collection.

Four years later, in 1941, the Hearst organization was still fighting for fiscal survival. By that time there were 94 Hearst entities with complex financial ties. With the entry of the United States into World War II, Hearst papers (reduced to a total of 18) dropped their isolationist stance and wholeheartedly supported the war effort. It was the war, opposed so staunchly by Hearst editorialists, that helped the company to regain its financial health by increasing circulation and advertising revenues.

At the end of 1943, the trustee and the Conservation Committee appointed in 1937 were succeeded by a voting trust that included two of Hearst’s five sons. The trust continued to sell off property, including two-thirds of Hearst’s vast San Simeon estate, and to rearrange assets, consolidating everything in 1943 within The Hearst Corporation holding company. By the end of the war in 1945, the company was on more solid financial ground once again. Three years later, the company entered a new field in communications when WBAL-TV in Baltimore, Maryland, began to broadcast.

Key Dates:

1880:: George Hearst acquires the San Francisco Examiner in payment for gambling debt.
1887:: Son William Randolph Hearst begins running the Examiner.
1895:: Hearst acquires the New York Journal.
1903:: The Hearst empire moves into magazine publishing.
1923:: Hearst moves into radio with purchase of WISN in Milwaukee.
1951:: William Randolph Hearst dies, leaving company to be run by non-family management.
1979:: The Hearst Corp. begins to expand its newspaper holdings.
1999:: The publicly owned Hearst-Argyle Television formed.
2000:: The company buys the San Francisco Chronicle and sells the Examiner.

New Leadership in the Postwar Period

By 1947, William Randolph Hearst, elderly and suffering from heart problems, had little involvement in company operations. On August 14, 1951, Hearst died, ending an era in U.S. journalism. His will stipulated that his $57 million estate be divided for tax purposes into a charitable trust and a restructured corporation. Hearst left the 100 shares of voting stock that controlled the company in the hands of a board made up of five family members and six company executives, insuring that those outside the family would have control of the corporation. One of the executives, Richard Berlin, took over as chief executive officer at Hearst’s death, after 32 years with the company.

During Berlin’s tenure, the company saw the collapse of its first base of operations, its newspapers, and expanded its holdings in other fields of the communications industry, such as magazines and television. The advent of television ended newspaper journalism as William Randolph Hearst had known it. No longer did the papers provide the public’s primary source of news. This change in social habits resulted in a vast shake-out in the newspaper industry, in which afternoon papers in particular were hard hit, the Hearst publications included. The first paper to go was the Chicago American, a long-time money-loser, which was sold to its competitor, the Tribune, in 1956. Two years later, the Hearst newswire, International News Service, and its affiliated photo service were sold to rival United Press. Under Berlin’s direction the company shed papers in San Francisco, Pittsburgh, Detroit, Boston, Los Angeles, and Milwaukee in quick succession. In 1963, Hearst sold its money-losing morning tabloid the New York Mirror, which had the second largest circulation in the United States. The cruelest blow came in 1966, when Hearst’s flagship Journal-American folded in New York.

In contrast, Hearst expanded its magazine operations throughout this period, concentrating on special interest publications rather than broad, general interest titles. In 1953, the company purchased Sports Afield and five years later added another men’s magazine, Popular Mechanics. Shortly thereafter, a Spanish edition of the magazine was granted the first license for a Hearst magazine foreign edition. Eventually, the company would successfully license over 100 foreign editions of its publications. In 1959, the company branched out into book publishing when it purchased Avon Publications, Inc., which produced paperbacks. In addition to new acquisitions, old publications underwent renovations, enabling them to contribute strong performances to the magazine group. Cosmopolitan, for instance, retooled in 1965 from a general interest magazine of fiction and nonfiction to the interests of working women and became a huge money-maker. In 1966, another venerable Hearst magazine, Good Housekeeping, became the leader in its field.

At his retirement in 1973, Berlin left Hearst debt-free and rich in capital, yet far poorer in publications and importance than it had once been. The following year the company was again restructured when it used the cash built up during Berlin’s tenure to buy back the stock held by Hearst charitable foundations, which had been established at Hearst’s death to avoid inheritance taxes. The Hearst family regained control of the company’s assets, now privately owned, and the chain of command within the company was simplified. Throughout the second half of the 1970s, under the leadership of John R. Miller, Hearst experienced a huge growth in profits, as properties that had been allowed to lie dormant began to produce. For instance, the company tapped the reserve of goodwill built up in the names House Beautiful and Good Housekeeping when it successfully spun off Colonial Homes and Country Living from the older publications.

New Ventures in the 1980s and Early 1990s

In 1979, Hearst again began to expand its newspaper holdings by buying five daily papers in mid-sized cities in Michigan, Texas, and Illinois. In the early 1980s, acquisitions continued until the newspaper group was 15 strong, with publications in Houston, Seattle, Los Angeles, and San Francisco, as well as other, smaller cities.

By the start of the 1980s, the Hearst magazine division was the largest U.S. producer of monthly magazines. It continued to perform well throughout the 1980s, adding Redbook, Esquire, a U.S. version of the British Connoisseur, and other titles. The Hearst magazine distribution network, which already included three subscriber services, purchased a fourth, Communications Data Services, Inc., in 1982.

During the 1980s the company’s scope shifted beyond print to encompass the whole spectrum of communications enterprises. Television and radio stations were acquired, and partnerships were formed to create the Arts & Entertainment Network (A&E) and LIFETIME, a network devoted to programming for women. In late 1990 the company bought a 20 percent interest in the sports network ESPN.

In 1995, A&E launched The History Channel, devoted to historical programming and viewed by more than 37 million households in the United States. Also that year, Hearst partnered New Century Network, a national network of local online newspaper services, with eight other newspaper publishers; the company ceased, however, its CD-Rom operations that were part of Hearst New Media & Technology. In 1997, A&E teamed up with Groupe AB of France to launch La Chaine Histoire, to offer French viewers French and international history programming drawn from the History Channel International’s program catalogue.

New Deals in the Late 1990s and After

The Hearst Corporation’s forays into new media continued in the late 1990s. A major deal was the merger of Hearst’s six television stations with Argyle Television in 1999. Argyle was a young company headed by Robert Marbut, whose career spanned the newspaper, broadcast, and direct mail industries. The combined company became a publicly traded entity, Hearst-Argyle Television Inc. The new company owned a total of 15 television stations and had assets of around $1.8 billion. The deal was spearheaded by Hearst CEO Frank Bennack, Jr., against the wishes of some of the Hearst heirs. William Randolph Hearst II filed a lawsuit protesting the plan, but the deal was completed anyway. Hearst Corp. owned 86 percent of the new company, which soon grew to blockbuster proportions. By 2002, it owned 26 television stations, claiming 17.5 percent of U.S. households as viewers. The Hearst Corp. also invested in a variety of on-line media in the late 1990s. Its business publishing division bought up a web-based electronics industry inventory database called Stocknet in 1999. The company was also part of a media consortium that bought an Internet-based classified ad distributor that year called AdOne. The company reorganized its New Media & Technology division in 1999, renaming it Hearst Interactive Media. The division collaborated with other investors and the toy company Mattel to form a new Internet company Genealogy.com. The company made many other stabs into computer-based media, many in joint ventures with other companies.

In print media, the Hearst Corporation also made major changes in the late 1990s. One of its big successes was the magazine division’s launch of O, The Oprah Magazine in April 2000. The glossy monthly was a joint venture with television talk show hostess Oprah Winfrey. By its sixth issue, O had garnered 900,000 readers and was pulling in hundreds of pages of advertising. The magazine division accounted for an estimated $1.5 billion of Hearst’s revenues for 1999, with $1.4 billion coming from newspapers, $900 million from its various cable holdings, and $500 million from its publicly held subsidiary Hearst-Argyle. Overall, revenue climbed 16 percent in the last two years of the 1990s, according to estimates made by Forbes magazine (December 25, 2000). In its march toward ever higher profitability, Hearst Corp. decided to fold William Randolph Hearst’s first paper, the San Francisco Examiner, in 2000, and bought the city’s rival paper, the Chronicle. Hearst Corp. paid $660 million for the Chronicle, a morning paper which was a stronger seller. The deal was complex. The two papers had had a joint operating agreement since 1965, but the weak performance of the afternoon Examiner led Hearst to announce it would shut the paper down. But when Hearst purchased the Chronicle, it was soon slapped with an antitrust suit alleging the single paper would form a monopoly. Though the suit was eventually dismissed, Hearst ended up selling the Examiner to a rival San Francisco publisher, Ted Fang. Hearst then gave Fang’s company a $66 million subsidy to help get the newspaper going. Hearst hired most of the Examiner’s staff for the Chronicle, and both papers put out their first editions under new management on the same day in November 2000.

Hearst CEO Bennack retired in December 2001, after leading the company for 23 years. He was credited with having grown the company into a modern media complex, while increasing revenue sevenfold and plumping profits to thirteen times what they had been when he started. He was succeeded by Victor F. Ganzi, formerly chief operating officer, who had been with Hearst since 1970. At the time of the transition, the company seemed to be in good shape, with a sound portfolio of media properties. The Hearst Corporation had evolved from a newspaper chain known for sensationalism and irresponsible journalism, and dominated by the will of one man, to a vast and highly profitable enterprise encompassing a broad range of communications fields.

Principal Subsidiaries

Hearst-Argyle Television, Inc.; iVillage Inc. (25%); King Features Syndicates, Inc.; A&E Television Networks (37.5%); ESPN, Inc. (20%)

Principal Operating Units

Hearst Magazines; Hearst Newspapers; Hearst Entertainment & Syndication; Hearst Business Media; Hearst Interactive Media; Hearst Broadcasting.

Principal Competitors

Gannett Co., Inc.; Knight Ridder Inc.; Condé Nast Publications Inc.; Viacom Inc.

The Hearst Corporation

views updated May 14 2018

The Hearst Corporation

founded: 1887

Contact Information:

headquarters: 959 8th ave.
new york, ny 10019 phone: (212)649-2000 fax: (212)765-3528 email: [email protected] url: http://www.hearstcorp.com

OVERVIEW

The Hearst Corporation is a media mega-company that operates newspapers, magazines, book publishing companies, television and radio stations, and many other media outlets, including ventures into new media.

Hearst Magazines is the world's largest publisher of monthly magazines. These include 16 U.S. titles and more than 90 international editions distributed in more than 100 countries. Hearst Newspapers publishes a dozen daily newspapers and seven weekly newspapers, and maintains a Washington news bureau. Hearst Broadcasting operates television and radio stations and a television production company. The formation of Hearst-Argyle Television Inc. in 1997 propelled Hearst into the ranks of leading U.S. television broadcasting groups. Hearst-Argyle, a public corporation reaching more than 10 percent of U.S. television-viewing households, was created when Hearst Broadcasting merged with the former Argyle Television Inc. Hearst is the majority shareholder of Hearst-Argyle Television, which is one of the largest U.S. independent owners of television stations.

Hearst's Entertainment & Syndication Division combines its cable network partnerships, television programming and distribution activities, and various syndication companies. Hearst is a partner or holds interests in several leading cable television networks, including the History Channel, Lifetime, ESPN, ESPN2, A&E, and Classic Sports Network. Another key part of this division is the King Features Syndicate, which is the world's largest distributor of comics and newspaper columns. Among its well read properties are "Hints from Heloise," "Blondie," and "Beetle Bailey."

Book publishers William Morrow & Co. and Avon Books are the two major imprints of the Hearst Books/Business Publishing division. Morrow is a publisher of hardcover books, while Avon publishes paperbacks. In addition to books published under those two imprints, the division publishes a number of books each year for special audiences, as well as a number of magazines. These range from books on electronic design and automotive engineering to Floor Covering Weekly and Diversion, a leisure time magazine for doctors.

Hearst's New Media & Technology division is blazing trails on the Internet and elsewhere as technology creates new markets for Hearst products. The division works with all Hearst groups to adapt existing products and resources to formats appropriate for new delivery systems such as the Internet.

Extensive real estate holdings are maintained by the Hearst Real Estate Division. These include timberlands and farming operations in California, along with commercial properties in San Francisco and New York City. The famous Hearst Castle, perhaps the best known piece of Hearst property ever, no longer belongs to Hearst, having been deeded to the state of California after the death of William Randolph Hearst in 1951. Located on the central California coast near San Simeon, the home is today a popular tourist attraction.

COMPANY FINANCES

As a privately held company, Hearst Corp. does not report full details on its financial operations. However, it is known that 1997 revenue for Hearst reached $2.7 billion, an increase of 5.1 percent over 1996 revenue of $2.57 billion. Revenue in 1995 totaled $2.51 billion, compared with 1994's $2.29 billion.

HISTORY

The history of the Hearst Corporation is overshadowed by the mythos surrounding its founder, William Randolph Hearst. Larger than life is his story and so public that the debate continues as to whether indeed Orson Welles, in his debut film Citizen Kane, patterned the life of his Charles Foster Kane after Hearst. There are those who claim Welles originally had another mogul in mind while crafting the movie—possibly Howard Hughes, whose life Welles examined briefly as part of his late-career film F is for Fake.

Young Hearst was handed control of the San Francisco Examiner in 1887 after his father, George, was elected to the United States Senate; the elder Hearst had reportedly gained ownership of the newspaper as payment for a gambling debt. Hearst's vigor and dramatic revision of the Examiner is almost legendary, and indeed is seen as having forever changed the face of American journalism. "He pioneered what might legitimately be called tabloid tactics," according to an article in the British magazine Campaign, "introducing cartoon strips and salacious stories to his titles. He was, in fact, the prototype media baron."

Hearst's next purchase was the New York Journal in 1895. His acquisitions continued, and in the 1920s Hearst owned newspapers throughout the United States. Company history holds that in that era "one in four Americans read a Hearst newspaper."

It was the Journal purchase that put Hearst in a head-to-head battle for circulation with another newspaper magnate, Joseph Pulitzer, owner of the New York World. The rivalry during the era of the Spanish-American War gave rise to what is known as "yellow journalism." The newspaper became more than a chronicle of news; it also, under Hearst, became a means by which he communicated his views, both personal and political.

As Hearst continued to acquire newspapers around the country, he also began to look to other emerging media. These included magazines, film, and radio, in all of which the company became involved before 1930. The company, for example, started the Hearst-Selig News Pictorial, a film newsreel production company that dominated film journalism in the 1920s.

FAST FACTS: About The Hearst Corporation

Ownership: The Hearst Corporation is a privately owned company.

Officers: George R. Hearst Jr., Chmn., 69; Frank A. Bannack Jr., Pres. & CEO; Victor F. Ganzi, Exec. VP & COO, 51; Gilbert C. Maurer, Exec. VP, 69

Employees: 15,000

Chief Competitors: A major force in both print and broadcast media, The Hearst Corporation faces competition in all the business in which it operates. Some of its major competitors are: Bertlesmann; CBS; Cox Enterprises; Gannett; K-III; Knight Ridder; McGraw-Hill; New York Times; Reed Elsevier; Time Warner; Times Mirror; Tribune; and Viacom.

For many observers of the Hearst empire, 1935 is seen as the year the company was at its height. Hearst controlled 19 newspapers, King Features Syndicate, international news and photo services (which would become folded into United Press International), 13 magazines, 8 radio stations, and 2 motion picture companies. Despite his success, in 1937 Hearst had to step down from the business and sell many of his properties, including a portion of his estate in San Simeon, to avert bankruptcy.

Upon Hearst's death in 1951, Richard Berlin, who had overseen the company since 1940, was made chief executive officer. The Hearsts kept a semblance of control over the company through a trust but didn't actually regain control until 1974.

Frank Bennack was appointed head of the company in 1979. Under Berlin the company had been pared down; Bennack, however, went on a spending spree, purchasing television stations, magazines, and other daily and weekly newspapers through the 1980s. Bennack also closed the doors of the legendary Los Angeles Herald Examiner in 1989.

New technologies signaled further changes for the Hearst Corporation as the 1990s began. Hearst made a major foray into the so-called new media arena with the establishment of its Hearst New Media & Technology group in 1993. This particular division works to create content in various electronic media based on its existing products.

George Hearst Jr., nephew to the founding family, assumed control of the company as chairman from Randolph A. Hearst in 1996. In March 1997 Hearst and Argyle Television Inc. announced an agreement to merge 6 Hearst television stations with 6 owned by Argyle to form Hearst-Argyle Television Inc. The 12 stations owned by Hearst-Argyle, along with another 3 the company will manage, reach nearly 12 percent of the U.S. television audience. Among the 12 television stations owned by Hearst-Argyle are 9 ABC-affiliated stations, more than any other television station group other than ABC itself.

In January 1998 Hearst announced the acquisition of Medi-Span Inc., an Indianapolis-based supplier of drug product information to the healthcare industry. Medi-Span joins Hearst's First DataBank Inc. of San Bruno, California, to become the corporation's second electronic drug database company. First DataBank, which supplies drug, nutrition, and medical information to healthcare companies and institutions, was acquired by Hearst in 1980.

STRATEGY

The San Francisco Examiner and San Francisco Chronicle have been in a joint operating agreement since 1965. Under this arrangement, also known as a JOA, two newspapers in the same market maintain separate news and editorial departments but share their business operations and split profits evenly. This San Francisco agreement is to last until 2005. Each paper holds the right of first refusal to buy the other.

According to a rival news service, "Hearst executives, rebuffed twice on offers to buy the Chronicle in recent years, have now proposed closing the Examiner. Hearst would hold a minority interest and grant Chronicle owners a substantial majority interest, perhaps as much as 60 to 65 percent, in a restructured joint operating agreement." The caveat: Hearst wants control of the combined newspaper. The company acted similarly in its dealings in the San Antonio market in the 1990s. Rumors throughout the 1990s abounded as to the future of the Examiner.

CHRONOLOGY: Key Dates for The Hearst Corporation

1887:: William Randolph Hearst gains control of the San Francisco Examiner
1903:: Starts Motor magazine
1895:: Purchases the New York Journal
1911:: Acquires magazine, Good Housekeeping
1928:: Purchases radio station, WISN in Milwaukee, Wisconsin
1937:: Hearst steps down and sells many properties to avoid bankruptcy
1943:: All of Hearst's assets are consolidated within The Hearst Corporation
1951:: William Randolph Hearst dies of heart attack; Richard Berlin is made CEO
1966:: Journal-American folds in New York
1974:: Hearst family regains control of company
1979:: Frank A. Bennack Jr. takes over as CEO
1989:: Bennack closes doors to Los Angeles HeraldExaminer
1993:: Hearst New Media & Technology group is established
1996:: George Hearst Jr. assumes control as chairman from Randolph A. Hearst
1997:: Hearst and Argyle Television Inc. announce agreement to form Hearst-Argyle Television Inc.
1998:: Announces acquisition of Medi-Span Inc.

"'The Chronicle has a capitalization shortage, a lack of a strategic plan, and short-term management', said a [DeYoung] family member [owners of the Chronicle]. 'That is a risky environment for the investor. That can be very dangerous. If we get the right deal at the right price, family members will be well-served'."

THE ENCHANTED HILL

More than 1 million people visit the Hearst Castle each year. William Randolph Hearst built the lavish "La Cuesta Encantada," or Enchanted Hill, during his lifetime, but deeded it to the State of California when he died in 1957. The enormous castle is a result of 28 years of work between Hearst and architect Julia Morgan. The building sits on a hilltop overlooking the Pacific Ocean and rests in the beautiful countryside of San Simeon, California. The architectural masterpiece offers 127 acres of gardens, terraces, and pools; 165 rooms in 4 different houses; and a zoo. Hearst was an avid collector of art and artifacts; and accordingly, his palace is filled with Italian and Spanish treasures. The grounds and castle are open to the public for tours.

INFLUENCES

Hearst has had a number of problems in its magazine division; high paper costs, postal price increases, and intensified competition for advertising dollars. In 1995 Hearst announced plans to raise cover prices on some magazines between 18 and 33 percent and to raise advertising rates 5 percent; coupled with this, circulation was cut approximately 10 percent. The annual savings realized was about $20 million per year. "It was an explosive cocktail and advertisers responded with predictable fury," according to Campaign. "Kraft Foods pulled all its advertising, worth $30 million, from Hearst magazines, and several other major advertisers, including the fragrance giant, Elizabeth Arden, cut back spending sharply." Bennack also replaced employees within the division, not the least of whom was Helen Gurley Brown, the grande dame of Cosmopolitan, who was replaced as editor-in-chief.

CURRENT TRENDS

Hearst made a major foray into the "new media" arena with the establishment of its Hearst New Media & Technology group in 1993. Designed to guide and manage the company's interests in the media, according to company literature, this particular division works to create content in various electronic medium based on its existing products. Employees are trained at the Hearst New Media Center, which also oversees digital production. In 1995, the company joined with eight other large newspapers to form New Century Network, designed to create a national network for online newspaper services. It also has interests in software applications and products, such as Netscape Communications.

PRODUCTS

Hearst's 12 newspapers include the Albany Times Union, Beaumont Enterprise, Edwardsville Intelligencer, Houston Chronicle, Huron Daily Tribune, Laredo Morning Times, Midland Dailey News, Midland Reporter-Telegram, Plainview Daily Herald, San Antonio Express-News, San Francisco Examiner, and Seattle Post-Intelligencer. The company publishes weekly newspapers in Texas and Michigan, and has a Washington, D.C. news bureau. It also operates Hearst Entertainment & Syndication, of which King Features Syndicate is a part.

Hearst Broadcasting is one of largest independent broadcasting groups in the nation. The company has television and radio stations in Baltimore, Boston, Milwaukee, and Pittsburgh as well as television stations in Dayton, Tampa, and Kansas City. Hearst has interest in cable networks including Lifetime Television, The History Channel, ESPN and ESPN2, and other stations and production subsidiaries.

Hearst Magazines titles include Colonial Homes, Cosmopolitan, Country Living, Esquire, Good Housekeeping, Harper's Bazaar, House Beautiful, Marie Claire, Popular Mechanics, Redbook, and SmartMoney. The company also has magazine and newsstand distribution as well as subscription fulfillment services.

The company's business also includes Hearst Books/Business Publishing (William Morrow & Company, Avon Books), Hearst New Media & Technology (shareholder in New Century Network, Netscape Communications, and Books that Work), and Hearst Real Estate.

CORPORATE CITIZENSHIP

In the spring of 1997 Hearst Corp. announced the formation of a Speakers Bureau program under which senior Hearst executives would visit college campuses to address students on a wide variety of topics relating to the media. The program came as part of an outreach effort by Hearst, following extensive dialogue with professors, department heads and deans of universities, colleges, and journalism schools, to establish contact with students at graduate and undergraduate levels. In announcing the program, Gloria Ricks, Hearst's deputy director of corporate communications and the overseer of the Speakers Bureau program, said: "We want to build stronger, closer ties with the most recognized and widely acclaimed institutes of higher learning. We know that our future employees and industry leaders are students in America's schools today."

ART IMITATES NATURE

In 1941 Orson Welles directed and starred in the film Citizen Kane. It was and still is a cinematic masterpiece. Called the greatest movie of all time by many critics all over the world, Citizen Kane, was actually modeled after the life and career of William Randolph Hearst.

Welles played Charles Foster Kane, a newspaper ty-coon with a life that paralleled the real life of William Randolph Hearst. The movie portrayed Hearst's wife, mistress, friends, and even his castle, La Cuesta Encantada, in the film called Xanadu. When Hearst found out that the movie portrayed him as uncaring and somewhat mad, he took enormous objection to it. He used his clout to try to block the movie's distribution. When that did not work he tried to buy the negative to destroy it. None of that worked and the movie was released. It is now a classic.

Sadly, Citizen Kane was not recognized for what it was at the time of its release. It did not get much theater play, which was partly due to the fact that many theaters would not even show the film because of Mr. Hearst's influence. However, it also lost out for best picture at the Academy Awards in 1941. Critics did not realize the film's greatness until many years later. Citizen Kane is now studied by every film major in the world. It is one of the most influential movies of all times. Its style has been copied numerous times and movies have been made about the movie. William Randolph Hearst swore until his death that he had never once viewed the movie, but no matter how adamantly against it he was, it will live on, and so will Mr. Hearst's legend.

GLOBAL PRESENCE

Hearst distributes more than 90 international editions of its magazines in more than 100 countries worldwide Hearst Magazines International, which is headquartered in New York City, oversees the publication of Hearst's leading consumer titles, around the world. These international editions are published through joint ventures, partnerships, and licensing arrangements, using material from the U.S. parent editions and other international editions and creating original content appropriate for each national or regional edition.

In the United Kingdom, the National Magazine Company Ltd., a subsidiary of Hearst since 1910, publishes nine monthly titles, including the British editions of Good Housekeeping, Country Living, Cosmopolitan, Esquire, and House Beautiful, as well as the popular women's titles Company, SHE, and Zest.

SOURCES OF INFORMATION

Bibliography

cook, richard. "hearst buys and diversifies to protect its media empire." campaign, 21 june 1996.

ewell, miranda. "san francisco chronicle, examiner merger talks move forward." knight-ridder/tribune business news, 22 march 1996.

"the hearst corporation." hoover's online, 17 may 1998. available at http://www.hoovers.com.

the hearst corporation home page, 17 may 1998. available at http://www.hearstcorp.com.

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. hearst's primary sics are:

2711 newspapers

2721 periodicals

2731 book publishing

4832 radio broadcasting stations

4833 television broadcasting stations

4841 cable & other pay tv services

Company Profiles for Students

The Hearst Corporation

The Hearst Corporation

Further Reading

The Hearst Corporation

The Hearst Corporation

Founder William Randolph Hearst

Company Perspectives:

Repercussions of the Great Depression

New Leadership in the Postwar Period

New Ventures in the 1980s and 1990

Principal Subsidiaries

Principal Operating Units

Further Reading

The Hearst Corporation

The Hearst Corporation

Founder William Randolph Hearst

Company Perspectives:

Repercussions of the Great Depression

Key Dates:

New Leadership in the Postwar Period

New Ventures in the 1980s and Early 1990s

New Deals in the Late 1990s and After

Principal Subsidiaries

Principal Operating Units

Principal Competitors

Further Reading

The Hearst Corporation

The Hearst Corporation

Contact Information:

OVERVIEW

COMPANY FINANCES

HISTORY

FAST FACTS: About The Hearst Corporation

STRATEGY

CHRONOLOGY: Key Dates for The Hearst Corporation

THE ENCHANTED HILL

INFLUENCES

CURRENT TRENDS

PRODUCTS

CORPORATE CITIZENSHIP

ART IMITATES NATURE

GLOBAL PRESENCE

SOURCES OF INFORMATION

Bibliography

For additional industry research:

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