A. H. Belo Corporation
A. H. Belo Corporation
Sales: $545.8 million
Stock Exchanges: New York
SICs: 2711 Newspapers; 4833 Television Broadcasting Stations
Originating as a small-town publisher of the Dallas Morning News and the Texas Almanac, A. H. Belo Corporation has become a diversified media company of national significance. The oldest continuously operating business in the state of Texas, Belo owns and operates newspapers and television stations in five U.S. metropolitan areas. The newspapers published by Belo are the Dallas Morning News and eight Dallas-Fort Worth community papers. In its broadcasting division, Belo operates its flagship station, WFAA-TV (ABC) in Dallas-Fort Worth; KHOU-TV (CBS) in Houston, Texas; KXTV (CBS) in Sacramento, California; WVEC-TV (ABC) in Hampton-Norfolk, Virginia; and KOTV (CBS) in Tulsa, Oklahoma. The company also operates a program development unit, Belo Productions, Inc., and DFW Printing Company, which prints USA Today’s regional edition.
A. H. Belo Corporation traces its roots to the Galveston Daily News, which was published by Samuel Bangs with a circulation under 200 in 1842, when Texas was still a republic. In 1857, Willard Richardson, who had replaced Bangs as publisher of the fledgling Daily News, created the Texas Almanac. Ten thousand copies of the first edition were sold. The Almanac became a valuable reference book for Texas farmers, ranchers, and businessmen, as well as a voice for the promotion of immigration. Richardson’s editorials advocated the importance of the railroads to the growth of the state of Texas—and to the future of newspaper distribution. By 1865, Richardson had turned the Galveston Daily News into the most powerful newspaper in Texas.
Former Confederate Colonel Alfred H. Belo joined the Daily News, succeeding Richardson as publisher and becoming majority owner of the company, in 1865. In 1881, Belo incorporated the Galveston Daily News. Belo expanded the company by starting a new newspaper in 1885 under the recommendation of George Bannerman Dealey, who Belo had hired as an office boy in 1874. The Dallas Morning News published its first edition in what was then the prairie town of Dallas, population 18,000. Using the telegraph to communicate across 315 miles, the Galveston Daily News and the Dallas Morning News issued the first wire-connected publication with joint issues. Dallas Morning News issues were delivered that year on special trains to Fort Worth, Dennison, and Waco to reach a year-end circulation of 5,678 daily and 6,435 Sunday papers. In its early years, the Dallas Morning News experienced steady growth in circulation.
Dealey’s prominence grew with the paper’s, and in 1920 he became president. Dealey became a well-known civic leader and visionary, bringing George Kessler to Dallas to devise a city plan, and urging the Morning News to take advantage of the sure potential of the new medium that was sweeping the nation: radio. In 1922, WFAA went on the air as the Dallas Morning News’s radio service and the first network radio station in Texas. The early broadcasts took place in the library of the Morning News office, with a canvas tent used for soundproofing. By 1930, WFAA would become the first super-power radio station in the South and Southwest, broadcasting at 50,000 watts. Nevertheless, the company maintained a decided emphasis on newspaper publishing and did not become seriously involved in broadcast media until the 1980s.
In 1923, the company sold its interest in the Galveston Daily News, focusing its newspaper operations entirely on the Dallas Morning News. Dealey acquired a majority interest in the company from Col. Belo’s heirs in 1926. With partner John F. Lubben, Dealey incorporated the company, naming it A. H. Belo Corporation in honor of his late employer and mentor. Still linked to the farm-based economy, the Dallas Morning News sponsored a “More Cotton on Fewer Acres” competition, with participation by over 7,000 farmers. Winners received cash prizes and publication of their farming techniques in a bulletin distributed in the Cotton Belt and overseas in Egypt, India, Brazil, and Mexico.
In 1950, Belo acquired KBTV (later renamed WFAA-TV), and became one of the first television broadcasting companies. Belo moved slowly into the television industry, however, with its primary focus remaining the Dallas Morning News. Belo would not buy a second television station until 1968, or a third until 1979. Nevertheless, Belo continued to expand in the 1960s, acquiring News-Texan, Inc., a publisher of seven community newspapers that would later form the Dallas-Fort Worth Suburban Newspapers, Inc.
By 1970, the Dallas Morning News had a circulation of 239,367 papers daily and 280,696 papers on Sunday—more than twice the circulation of 1940, and over thirteen times the population of Dallas when Dealey had returned from his scouting mission in 1885. Seeking to further improve its product, the Morning News commissioned a study of the interests of Dallas readers in 1978. As a result of the study, the paper increased its coverage of high-interest areas, especially through the development of innovative fashion and entertainment sections. The Morning News garnered three Pulitzer Prizes during the 1970s, and its sports coverage was recognized by the Associated Press Sports Editors in its national 10 best sports sections list.
A. H. Belo Corporation became a public company in 1981, with its initial offering of 3.9 million shares on the New York Stock Exchange priced at $11.50 per share. In 1983, Belo shed its publishing-only orientation by making the largest broadcast purchase in national history. For $606 million, Belo acquired KHOU-TV (Houston), KXTV (Sacramento), and WVEC (Norfolk), all of which were licensed to Corinthian Broadcast Corporation from the Dun & Bradstreet Corporation. To comply with Federal Communications Commission rules regarding the purchase, Belo sold Texas station KDFM-TV and Tennessee station WTVC, recouping approximately $ 105 million. An asset redeployment plan led to the sale of the company’s cable system and its four radio stations, and Belo raised additional capital by selling 4.4 million shares of stock.
It appeared that the acquisition might bring trouble to Belo when the biggest of the four television stations, KHOU-TV in Houston, was hurt by a lagging Texas economy. However, Belo’s revenues reached $354 million in 1984, with KHOU-TV and the flagship station WFAA contributing two-thirds of the company’s total revenues. Though the company’s stock had risen 29 percent (to $42.50 per share) between 1981 and 1983, when it made its intention to acquire the Corinthian outlets public, Belo’s stock reached a record high of $55 per share in 1985. The next year, after 40 years with Belo, chairman and CEO James Moroney retired, and Robert Decherd took the mantle.
Overproduction of oil and overbuilding of real estate struck a blow to the Texas economy in the mid-1980s. Ward Huey, president of Belo’s broadcast division, recognized the danger posed to the earnings of Belo’s newly acquired television stations by Texas’ lagging economy. Huey instituted cost-cutting measures including layoffs, salary freezes, and the postponement of plans for new transmitter towers and upgraded production equipment. Due to the weak economy in Dallas-Fort Worth and Houston, net earnings continued to decrease in 1986, although both television and newspaper revenues showed increased profits.
Even with financial difficulties, the Dallas Morning News took the lead over its local competitor, the Dallas Times-Herald, in the 1980s. In 1986, the Morning News achieved a new circulation record and won a Pulitzer Prize for a story on housing discrimination that resulted in Senate hearings and national corrective actions. The Dallas Morning News circulation grew to 404,812 daily and 618,283 Sunday by 1991.
Belo moved forward in a bold new direction when it formed a partnership in 1989 with Kansas City-based Universal Press Syndicate to create programming based on the UPS roster of comics and columnists. The first Universal Belo project was an animated strip based on the ’Tank MacNamara” comic, designed for prime-time specials and network sports events. Animation for the strip was created at the California Film Roman studios. The Dallas Times-Herald lost all of its Universal columns and cartoons as a result of the new partnership and brought an antitrust lawsuit against the Morning News. The lawsuit and its appeal were unsuccessful, but Belo paid a $1.5 million settlement to its competitor.
The Texas economy began to rebound as the 1980s came to a close, and Belo’s television ratings soared. In 1989, Belo syndicated Mr. Peppermint, a Dallas children’s program it had aired for 25 years. WFAA’s Texas Country Reporter was sold in 22 Southwestern markets, and WFAA, after several flat years, saw a 16 percent increase in earnings between 1987 and 1989, when earnings reached $73.3 million. During that same period, KHOU-TV increased its revenues by 9 percent to $46 million. By 1990, the formerly troubled KHOU-TV had risen in the ratings from a distant third to number two, giving Belo a number one or two rating for all of its television stations.
Just as the Texas economy improved, a national recession began that dramatically impacted newspaper advertising. Newspapers experienced their worst year in a decade in 1990. While the Dallas Times-Herald slashed its advertising rates, Belo CEO Decherd held a firm line with rate cards. The Dallas Morning News achieved only slight gains in overall advertising, but boosted its circulation by 4 percent daily and 6 percent Sunday, posting higher increase rates than those experienced by the Dallas Times-Herald. By this time, the Morning News’s circulation rates doubled those of the Times-Herald.
The war between Dallas’s two major newspapers ended in 1991. On December 9th, the Dallas Times-Herald published its last issue after 112 years. Belo acquired the Herald’s assets in a $55 million deal, becoming the only major newspaper publisher in Dallas. Twelve other major newspapers also succumbed to the recession, closing their doors in 1991.
The acquisition of the Times-Herald caused Belo to change its financial plan in 1992. With circulation boosted in one year to a half million papers daily (a 26 percent increase) and 800,000 Sunday (a 31 percent increase), the Morning News was pushing its production capacity. The newspaper recession showed signs of ending, and circulation figures placed the Morning News among the nation’s most highly read papers for the first time, making national advertising a strong possibility. While other newspapers experienced slow recovery, the Morning News used 30 percent more newsprint in 1992 than it had the previous year, publishing a Sunday paper on December 6th that was so large it delayed deliveries by an hour. Decherd adamantly refused to raise the newsstand price from 25 cents, espousing the philosophy that rampant price increases at other newspapers were too aggressive, cutting into reader retention. To manage its growth, Belo invested $41 million in the expansion of its newspaper production plant in Piano, Texas.
The production facility expansion was completed in 1993, and the suburban newspaper operation in Dallas-Fort Worth was restructured into two separate entities, one printing eight community newspapers and the other functioning as a commercial printer. The Dallas Morning News won its fifth Pulitzer Prize in eight years, for sport news photography of the 1992 summer Olympics. Circulation of the Morning News held strong at 527,387 daily and 814,404 on Sunday.
Television as well as newspapers were profitable for the company in 1993. Four of Belo’s five television stations were rated number one in overall audience delivery, and Belo announced plans to purchase WWL-TV, an affiliate of CBS in New Orleans. Programming activities were placed under the authority of the newly created Belo Productions, Inc. (BPI), an entity that oversees potential pay-as-you-go cable and television programs in conjunction with Universal Belo Productions. In 1993, Belo’s stock reached $53 per share and sales were $545 million.
A. H. Belo Corporation’s future will undoubtedly contain new technological challenges, signalled by the advent of the information superhighway and its implications for publishing. Belo’s history demonstrates careful planning, thoughtful expansion, and a philosophy of “doing a few things well” that has allowed the company to weather changes in the economy. Should the company’s future follow the pattern of its past, the next few years are likely to be spent fine-tuning Belo’s role in the broadcasting market while continuing—as Belo has for over 150 years—to publish a quality daily newspaper.
Dallas Morning News; DFW Suburban Newspapers, Inc.; DFW Printing Company, Inc.; WFAA-TV (ABC) Channel 8 (Dallas-Fort Worth, Texas); KHOU-TV (CBS) Channel 11 (Houston, Texas); KXTV (CBS) Channel 10 (Sacramento, California); WVEC-TV (ABC) Channel 13 (Hampton-Norfolk, Virginia); KOTV (CBS) Channel 6 (Tulsa, Oklahoma); Belo Productions, Inc.
A. H. Belo Corporation, Commemorating One Hundred and Fifty Years 1842-1992, Dallas: A. H. Belo Corporation, 1992.
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