The purchases come as most players in the media industry are actively looking to exit the space. Peacock recently premiered a series, called The Paper, entirely built around the premise that the economics of local news are backwards. So why is Hearst getting further invested?
For starters, it helps to understand that while the Hearst name might be synonymous with newspapers and magazines—it owns heavyweights like Cosmopolitan, Good Housekeeping, and Esquire—the vast majority of its revenue now comes from a series of deeply boring, incredibly lucrative businesses far removed from the media world.
According to media executive Colin Morrison, who chronicled Hearst’s business in a blog post in July, the company generated around $13 billion in revenue last year and turned an operating profit of $1.5 billion. The bulk of that revenue comes from its B2B portfolio, according to Morrison.
For example, Fitch, the 112-year-old bond ratings group owned by Hearst, accounts for 17% of the company’s annual income, an estimated $2.5 billion last year, per Morrison.
That alone is more than the $2.4 billion Hearst’s entire media division brought in in 2024, according to Morrison. Even so, a source familiar with Hearst’s business tells me that its news division, despite industry headwinds, is profitable and expected to continue to operate profitably.
As a result, the outsized performance of Hearst’s other properties—which include a 20% stake in ESPN—has allowed it to continue investing in print and digital media businesses with far more patience than its peers.
The unique legacy of Hearst as one of the original newspaper chains also plays a role in its ongoing interest in the news media business. In an era of cost-cutting, Hearst has repeatedly vocalized its commitment to journalism and the news business and considers it core to its identity.
Chief executive Steven R. Swartz has talked openly about the importance of maintaining the diversity of its portfolio, holding onto news publishers and magazines even though jettisoning them would almost certainly boost its margins. Hearst rarely makes cuts or closes outlets—it famously gave bonuses to its employees in the early days of the pandemic.
Now, as it becomes more challenging than ever to operate as an independent news outlet, the company is taking advantage of some opportunistic acquisitions to grow its news business even further.
The Dallas Morning News, for instance, was one of the last family-owned independent news operations in the country, owned by longtime publisher George Bannerman Dealey and his descendants since Dealey purchased the paper in 1926.
In recent quarters the Dallas Morning News had struggled to turn a profit, according to public financials. Mike Orren, formerly its chief product officer, told me that its balance sheet struggles were, at least in part, the result of a mandate to invest its cash into transitioning the business into a sustainable digital operation.