Hearst celebrates its 135th anniversary this year. The privately held global conglomerate owns many newspaper, magazine and television companies, but has also diversified by acquiring many business-to-business operations in the automotive, medical and financial industries as well.
In 2019, Marketplace host Kai Ryssdal spoke with Hearst president and CEO Steven Swartz. Now, amid high inflation and supply chain issues, we caught up with him again to find out how the company is managing the business. Below is an edited transcript of their conversation.
Kai Ryssdal: OK, so I came to New York three years ago, went to the very cool Hearst Tower, and we had a good, long talk. Here’s what I want to start with. Very different economic times now compared to three years ago. What do you mean?
Steve Swartz: Well, you know, so far this year, we’ve had a really good year. And obviously, all of us are concerned about, you know, what’s going on with inflation, mainly about the war in Ukraine, the prospect of a recession – not just in the United States, but around the globe. So, you know, we’re taking a very cautious view for the rest of this year and obviously probably into next year.
Ryssdal: When you say “cautious prospect,” are you slowing hiring? Are you doing something different? You know, paying attention to your P’s and Q’s?
Swartz: No, you know, we’re not slowing hiring. We have many internal growth projects that we are excited about. But you know, we’re certainly pulling back on our forecast, not looking as rosy, and there may come a point where we see some unnecessary spending or some things have to be slowed down. But so far, we haven’t done that.
Ryssdal: You know, I was surprised while reading this interview, I was surprised to see that you just bought Bring a Trailer, and so now you’re getting into automobiles. And I guess my question is, do you worry about spreading yourself too thin?
Swartz: This is a very fair question. And we watch it all the time. We’re in many businesses, but I’d say we’ve been in the car business for a long time, Kai. We own the Motor database. We own the Black Book database of used car prices, and we own Car & Driver and Road & Track. And it was those colleagues who 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. It really is a phenomenal business.
Ryssdal: And it’s super fun. As a guy who surfs the internet, it’s nice to see all those old cars, which I come across from time to time in my random internet wanderings. 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 have to buy this,” did that bother you? How is this decision 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 us. My senior colleagues and I look at acquisitions and then take it to our board of directors. And despite the fact that, you know, it was relatively early days of the pandemic, they couldn’t have been more supportive. And we’re very glad they were because it turned out to be a great business.
Ryssdal: Let’s talk a little more about life after the pandemic at Hearst. As you look at what you’re trying to do, do you have supply chain concerns? Worried about inflation? I mean, these are things that, you know, business managers everywhere are worried about.
Swartz: I would say for sure we have all of the above. I don’t believe they are mutilated in any way. And as I said, so far this year – year to date – our earnings are 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 biggest concerns are what inflation, rising interest rates will do to the overall economy and thus our ability to continue to grow and sell our products and services.
Ryssdal: Without making this a softball question – and I realize I’m underestimating myself a bit there, but what the hell – why do you think last year was a record year for Hearst? I mean, yes, there’s been a lot of economic growth across the country, but why you specifically?
Swartz: We just have this legacy and this history of taking our skills and finding adjacent areas where there’s good growth. One of the things that we do is that we’re both a good home for entrepreneurs who are looking to sell maybe most of their business, but are looking for a home that you’re not going to resell it in a few years as private equity. . But we also keep moving forward. You know, even some of our older businesses like newspapers and magazines came back strongly 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’s this: 135 years old this year, the Hearst Corporation is. If the original Hearst—William Randolph—came strolling down the halls today and knocked on your door, what do you think he’d tell 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 consumer news, although it’s important, but we’ve moved into all of these B2B sectors and shown that we can take those capabilities and find new growth. So I would like to think that he would be, he would be happy with what he would see.
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