Hearst Corp. (Hearst-Argyle Television Inc.)

Though publicly traded corporations dominate today’s media landscape, family dynasties built the country’s first media empires. A few family-owned companies have survived into the 21st century, and none has played a more prominent role in the development of mass media than Hearst Corp.

Hearst, No. 42 on Forbes magazine’s list of the largest private companies in 2003, publishes 12 daily newspapers, including the San Francisco Chronicle and the Houston Chronicle. The company’s 18 magazines are among the most well-known and widely read in the country. Hearst publishes Cosmopolitan, Esquire, Good Housekeeping, O, The Oprah Magazine, Redbook and Popular Mechanics, among others. It also controls King Features Syndicate, the largest distributor of comics in the United States, in addition to other entertainment. But it is the company’s television broadcast holdings that probably hold the most influence.

Hearst-Argyle Television Inc. owns or manages 27 television stations in cities like Boston, Tampa, Pittsburgh, Sacramento and Baltimore. While Hearst Corp. is a private company, Hearst-Argyle is traded on the New York Stock Exchange. The company was created in August 1997 when Hearst joined with Argyle Television Inc. Hearst Corp. is majority shareholder.

Hearst Corp. traces its roots to 1887, when William Randolph Hearst became “proprietor” of the San Francisco Examiner. History has not been kind to the memory of Hearst, who, along with his competitor Joseph Pulitzer, was a progenitor of “yellow journalism,” a type of sensational reporting whose primary function was to create scary headlines, sell newspapers and pump up circulation and advertising revenue. Both men were accused of goading America into a war with Spain in an effort to sell newspapers. Hearst’s life was loosely chronicled in the movie classic Citizen Kane, starring Orson Welles as a Hearst-like media tycoon.

Whatever history’s opinion of Hearst, his company has endured. Upon his death, he directed all the company stock be placed in a trust, to be controlled by family members and outside directors who act as trustees in accordance with his will.

His penchant for competition seems as antiquated as the Victorian age. For 21 years, Hearst’s Seattle Post-Intelligencer has had a joint operating agreement—an exemption from antitrust law that allows the paper to cooperate with a rival—with The Seattle Times. The Blethen family, which controls 50.5 percent of the Times, informed Hearst that the paper had lost money three years in a row. This development activated a clause in the JOA that would lead either to the termination of the agreement or see the Post-Intelligencer shut down. Hearst has said it would close the paper if the operating agreement ends.

A civic action group called the Committee for a Two-Newspaper Town has asked the Justice Department to intervene and preserve the joint operating agreement; there have been reports of recent backdoor negotiations between the two sides as well. Whatever the outcome, the chapter doesn’t quite jibe with Hearst mythology.

Though the company’s origins were in broadsheets and linotype, Hearst has expanded into more modern means of media communications. Hearst holds stakes in cable television networks A&E, Lifetime and ESPN. It also owns a 30 percent stake in iVillage, a Web network aimed at women.

Not surprisingly, last year, when the FCC considered whether to eliminate a rule preventing newspaper owners from owning television stations in the same market, Hearst came out in favor of eliminating the ban.

—John Dunbar, Robert Morlino

August 20, 2004

Sources: Hearst Corp., Forbes magazine Web site, TNT Web site, Broadcasting & Cable, The Seattle Times