By Andy Serwer

Hearst is one of America's biggest private businesses, with a rich history as a consumer-facing company that produces high-profile magazines (such as Cosmopolitan, Good Housekeeping, and Runner's World) and newspapers (among them the San Francisco Chronicle, the San Antonio Express-News, and The New Haven Register.) Yet in recent years, the storied company -- which began with just The San Francisco Daily Examiner in the late 19th century -- has been diversifying its business-to-business commerce.

I recently sat down with Hearst CEO Steve Swartz -- a recovered journalist who worked at Barron's parent Dow Jones for a number of years -- as part of our At Barron's interview series.

Below are some highlights from our conversation, which have been edited and condensed for clarity.

Barron's: Steve, you recently announced 2024 results for the company -- revenue of $13 billion, up 9% from the prior year. Fifty percent of the profits of the company now come from non-consumer parts of the business. How are you getting this done?

I think the key for us is diversification, and really it's been the key for us since the company started. [Founder] William Randolph Hearst started us in the newspaper business, pushed us in the magazines, tried many other things, and before he died, he bought one of the first television stations. So he very much believed in it.

Then my predecessor, Frank Bennack, who ran the company for 30 years, pushed us more into television, into cable television, and got us into the b-to-b businesses that have become so important to us. So really, just a diversified mix. And a couple of our businesses really shot the lights out last year.

Ten years ago, the b-to-b part of the business was 15% of the profits. Today it generates over 50%. Talk about parts of the business that are doing particularly well.

We are very focused. I think the whole company, including our board and our Chairman, Will Hearst. We are both now a b-to-b business and a consumer media business. We're still very proud of our consumer media businesses. But last year, our Fitch bond rating business just had a spectacular year. It was a very good bond market, but our folks just did a great job. I think they've been taking market share.

Their analysis is respected around the globe. And then our 35 Hearst television stations, local television stations, had a great year. Yes, helped by the fact that it was a political year, and they got a lot of political advertising. But we're number one in most of our markets, and it's a business that we're good at.

I want to ask you about the newspaper business. That is a business in decline. There's no two ways about that. But you've actually been expanding. You bought the newspaper in Waterbury, Connecticut and the newspaper in Austin, Texas from Gannett. Why the heck are you guys doing that?

I don't know that the business as a whole has to be in decline. Clearly, print is in decline. It's regrettable. It's still my favorite way to read the newspaper. I think that's mostly because advertisers have moved on to more data centric mediums.

I think there's still a lot of readers who still like print, but obviously digital is where everything's going. We've had excellent growth in our digital subscription. So I don't know that the business has to decline. We believe we can get growth in the newspaper business.

Texas is a big point of emphasis for your company, it looks like.

We're very committed to Texas. We own the Houston Chronicle, the San Antonio Express News, and as you said we recently agreed to acquire the Austin-American Statesman. But we also own a number of other newspapers there. We're in Beaumont. We're in Laredo.

I'm going to go next to ESPN. You have a 20% stake in that company. It has been a huge home run for Hearst over the years, however, of course, there are headwinds facing that company right now. What's your take on ESPN? And I noticed that you said a new direct-to -consumer initiative is coming from them this summer.

We couldn't have better partners than [Disney CEO] Bob Iger and [ESPN chairman] Jimmy Pitaro. What they're doing at ESPN, I think, is fabulous. If you look at television, sports is clearly the number one property in television, and ESPN is by far the number one player in sports.

What Bob and Jimmy are doing is, bringing out later this year, a direct-to-consumer version of what ESPN calls its flagship product, what you can now see on ESPN or ESPN2. That will supplement the very strong position that ESPN already has in the traditional bundle, which you can still get through linear means or digital means.

Are people still going to be reading print glossy magazines 10 years from now?

I think so. Perhaps not every title, and not every month. Many of our titles now sell what's called a membership, which has many benefits, including premium digital content delivered daily and perhaps the magazine is delivered four times a year or six times a year. But there is something special about something tangible in your hands.

Hearst is one of America's most high-profile, oldest and biggest private companies. Any IPO on the horizon Steve?

The company is owned by a trust that Mr. Hearst set up. We trustees have no plans to do anything other than continue to run the business and fulfill our mission.

Write to Andy Serwer at andy.serwer@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 29, 2025 01:00 ET (05:00 GMT)

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