Hearst is celebrating its 135th anniversary this year. The privately owned global conglomerate owns many newspapers, magazines and television companies, but it has also diversified by acquiring plenty of business-to-business operations in the automotive, medical and financial industries too.
In 2019, “Marketplace” host Kai Ryssdal spoke with the president and CEO of Hearst, Steven Swartz. Now, in the midst of high inflation and supply chain issues, we checked back in with him to find out how the company is managing business. The following is an edited transcript of their conversation.
Kai Ryssdal: OK, so I came to New York three-ish years ago, went to the very cool Hearst Tower and we had a good, long chat. Here’s what I want to start with. Very different economic times right now versus three years ago. What’s your sense?
Steve Swartz: Well, you know, so far this year, we’ve had a very good year. And obviously, all of us are concerned about, you know, what’s happening with inflation, basically the war in Ukraine, the prospect of a recession — not only in the United States, but around the globe. So, you know, we’re taking a very cautious outlook for the rest of this year and obviously probably through next year.
Ryssdal: When you say “cautious outlook,” are you slowing hiring? Are you doing anything different? Are you just kind of, you know, minding your Ps and Qs?
Swartz: No, you know, we’re not slowing hiring. We’ve got a lot of internal growth projects that we’re excited about. But you know, we’re certainly pulling back our forecast, not looking as rosy, and there may come a time when we find some spending unnecessary or some things will have to slow. But so far, we haven’t done that.
Ryssdal: You know, I was surprised in the course of reading up for this interview, I was surprised to note that y’all had just bought Bring a Trailer, and so you’re now getting into automotive. And I guess my question is, do you worry about spreading yourself too thin?
Swartz: That’s a very fair question. And we look at that all the time. We are in a lot of businesses, but I would say we’ve been in the auto business for a long time, Kai. We own the Motor database. We own the Black Book database of used car pricing, and we own Car and Driver and Road & Track. And it was those colleagues that found Bring a Trailer. Bring a Trailer is the leading online platform for buying and selling classic cars. That business has just been a rocket ship. It really is just a phenomenal business.
Ryssdal: And it’s superfun. Just like the guy flipping through the internet, it’s cool to look at all those old cars, which I do from time to time in my random wanderings online. But let me ask you — so this is kind of a process question. When your colleagues at Car and Driver found Bring a Trailer and said, “Listen, we ought to buy this,” did that get up to you? How does that decision get made for a conglomerate like yours?
Swartz: Oh, absolutely. Well, you know, we try not to be too bureaucratic. But we have a small team that helps. My senior colleagues and I look at acquisitions, and then we took it to our board of directors. And despite the fact that, you know, it was the relatively early days of the pandemic, they couldn’t have been more supportive. And we’re so glad they were because it’s turned out to be a great business.
Ryssdal: Let’s talk a little bit more about post-pandemic life at Hearst. As you look at what you’re trying to do, do you have supply chain concerns? Do you have inflation concerns? I mean, these are things that, you know, business managers all over the place are worried about.
Swartz: I’d say certainly we have all of the above. I don’t believe they’re crippling in any way. And as I said, so far this year — year to date — our profits are up above last year, and last year was a record year. And again, for a company that’s 135 years old, that’s not too bad. I would say our bigger concerns are what inflation, what rising interest rates, will do to the general economy and thus our ability to continue to grow and sell our products and services.
Ryssdal: Without making this a softball question — and I understand I’m undercutting myself a little bit there, but what the heck — why do you think last year was a record year for Hearst? I mean, yes, there was a lot of economic growth all over the place, but why you guys specifically?
Swartz: We just have this legacy and this history of taking our skills and finding adjacent areas where there is a decent amount of growth. One of the things we do is both we’re a good home for entrepreneurs who are looking to perhaps sell most of their business but are looking for a home that won’t resell it in a few years like private equity. But we also just continue to push forward. You know, even some of our oldest businesses like newspapers and magazines made a strong comeback last year, and so far they’re continuing to grow this year.
Ryssdal: Last question and then I’ll let you go, sir, and it goes like this: 135 years old this year, the Hearst Corporation is. If the original Hearst — William Randolph — came walking the halls today and knocked on your door, what do you think he’d say to you about the state of his company?
Swartz: You know, I’d like to think he’d be pleasantly surprised that not only have we continued to build the media business that he loved so much, but I think he’d be pleasantly surprised at how we’ve redefined high-quality information. That it’s not just news for the consumer, although that’s important, but we’ve moved into all of these B2B sectors and showed that we could take those skills and find new growth. So I’d like to think he’d be, he’d be happy with what he’d see.