Steven Swartz

Seth Green: Well, good morning, good morning. And let me not only welcome the people who are wonderfully in this room, but the hundreds that are joining us online for this conversation on enduring excellence with Steve Swartz. We are very grateful to have you here, Steve, and very honored for this opportunity to dig into your remarkable life. For those of you who I haven’t met and those online, I’m Seth Green. And on a morning like this one, I’m especially grateful to say I’m the dean at the University of Chicago’s Graham School, and we are the proud home of lifelong learning and leadership at one of the world’s great universities. I’ll tell you a little bit about Graham and how he came to this series, and then I’ll introduce our incredible guest and we’ll have a wonderful discussion. So the Graham School is the founding division of lifelong learning at the university. We were started when William Rainey Harper and John D Rockefeller were imagining what the university would become, because they wanted to make sure that this was a university, not only for the traditional student, but for the life of the mind across all ages and stages of life. And so we actually began our first classes on the second day of the university in 1890. And that was because what we were trying to accomplish was really spread knowledge to individual. And the quote from that time, whose daily occupations made it impossible for them to be in a traditional college setting.

Seth Green: And so we started them here in downtown Chicago, and we started them in areas of liberal arts, because we wanted to make sure that even individuals that couldn’t come for a traditional college experience still could be a part of this important conversation across time and space. And underlying that idea was a belief that learning and life of the mind had no expiration date, and that you want to be constantly learning and constantly pursuing your growth and excellence. And as we came to this conversation series, That was the same theme that really underpinned our thinking, which is how do you endure in your excellence? And what we’ve heard so far from every speaker is that learning and growing is a constant activity, and that you’re constantly putting yourself into new experiences that force you to have an expanding mindset and a way of looking at the world that is constantly changing. And so Tyler and I began a conversation about a year ago about what would it look like to talk to individuals who have been able to accomplish that kind of learning, growth and impact at the highest levels, and to talk with them deeply about how and why they were able to achieve that kind of success. And we’ve luckily over this year had incredible people join us Mellody Hobson, Brian Moynihan, Indra Nooyi, Al Michaels and others.

Seth Green: And today we are joined by a truly remarkable complement to those guests. Steve Swartz, who is the leader of Hearst, but also someone who has spent a life in making the world a more kind of exceptional place for readers and for our society to deeply understand the world. So in his current role, he leads one of the most significant global media companies and most diversified companies in the world and includes everything from Fitch Ratings all the way over to many magazines that each of us have on our shelves. But he came to this work as a journalist. He started as a reporter at the Wall Street Journal, and then was able to navigate what has been an ever shifting media landscape and ultimately to lead it. And over the course of this conversation, we’re going to be able to dig into that extraordinary story. And the leader of the conversation. And our host for this is going to be Tyler Mathieson. As many of you know, Tyler is a distinguished fellow here at the University of Chicago, Graham School, and he has an extraordinary career himself as a business journalist, having spent decades at CNBC as an anchor, including a power lunch. And so with that, let me turn it over to two great individuals, and I can’t wait to hear your story, Steve.

Tyler Mathisen: Seth, thank you very much. And thank you all for coming this morning and joining us for what I’m sure is going to be a very interesting conversation. We’ll talk about journalism, we’ll talk about business, we’ll talk about trust among many other topics. I really do want to thank you all for coming. I especially want to thank Seth because this is the only way I would ever get into the University of Chicago. And I want to thank Steve for making the effort to come out. It’s great to spend some time with you together. Steve and I actually started in journalism at roughly the same time some 40 years ago or thereabouts. And we, we share in common and we’ll explore this a little bit later. Something that I think is going to be almost unheard of. It’s almost unheard of today. But in today’s economy and the one going forward is going to be extraordinarily unusual. Steve has really only worked in two places over 40 some years, and I only worked in two places over some 40 years. I worked for Time Incorporated, which now exists no longer unlike Hearst. And then I worked for NBC. I, I’ve often begun these conversations, Steve, with sort of random bizarro questions.

Tyler Mathisen: But, but for this occasion, I think it would be interesting because of what we’ll follow for you to tell us a little bit about Hearst, the business. When I think of Hearst, the business, I think of a quiet giant because it is a big, big company, one of the largest privately owned, privately held companies in the country, 13 billion in annual revenues, some $14 billion worth of acquisitions over the past decade or thereabouts. You’ve done those acquisitions with no debt. But I think of Hearst also as quiet, in part because you’re private and you don’t have to talk to analysts every quarter. And because of the corporate structure under which you operate, which is a family, which is a trust heavily populated with Hearst family members. But then what’s really curious about Hearst is what Seth referenced, and that is the diversity and seeming unrelated, unrelated ability of all the businesses that you have. You’ve certainly got magazines, but you’ve got health care, you’ve got newspapers and transportation management companies. You’ve got television stations you own. People don’t even know this. Hearst owns 20% of ESPN, right? Yes.

Steven Swartz: Now, because we sold a little bit, we and Disney sold a little bit to the NFL, to the NFL 18%.

Tyler Mathisen: But a big hunk of ESPN. And I’m sure those checks help. And you’ve got ESPN and a bond rating service to the outsider. This makes no sense. So tell me why it does make sense and what these businesses have in common and why the sum is greater than the parts.

Steven Swartz: Well first of all, thank you for having me. Dean Green. Thank you for having me. You know, I told my younger son that I was doing this, and I ticked off the really impressive CEOs that you’ve already had. And they didn’t faze him at all. But when I said you had Al Michaels here, he couldn’t believe you guys got Al Michaels to come here and do this. So congratulations on that. Well, our company is 139 years old. Founded by by the legendary William Randolph Hearst in 1887. William Randolph Hearst did not even have to work because his father, George Hearst, was one of the richest men in the United States. He was one of the great miners of the Western migration. When if you think back in history, Anaconda, Comstock, homestead, George Hearst was there and walked away with more than his fair share of the gold, silver, or copper. He became a United States Senator from the state of California before he died, and he amassed massive swaths of investment properties in California and Mexico. And the Hearst Castle that William Randolph built is on land that his father owned. And and that our company still owns to this day. The castle itself was given to the state of California as a, as a museum, but the company still owns and still ranches those lands. So that’s another piece of our diversification story. We do grass fed beef. We have a sustainable 100,000 acres of sustainable logging that we do up near the Oregon border in California. So. So the company started as a newspaper company and I think a strong mission because, as I said, William Randolph didn’t even have to work.

Steven Swartz: But as a very young man, his father had somehow come to acquire a newspaper, the San Francisco Examiner, and he asked his father as a very young man, could he take this over? And that was the beginning of our company. He he soon made the examiner a star paper in California, but he didn’t rest there. He went across the country and took on Joseph Pulitzer in New York. And then at one point, as he expanded his newspaper empire, 1 in 5 Americans were reading a Hearst newspaper. But he didn’t stop there. He saw an adjacent area with perhaps more growth at the beginning of the 1900s. The magazine business. And he pushed us into the magazine business. And today we still publish cosmopolitan Good Housekeeping. Car and driver, Road and Track, Esquire, Elle, Harper’s Bazaar. We have a ton of magazines. We still have a ton of newspapers. The San Francisco Chronicle’s our flagship the Houston Chronicle. We have a number of newspapers and we’ll talk, I guess, a little bit. We acquired some newspapers last year. But then, you know, he, he tried all kinds of things. He tried the movie business. We weren’t quite good at that. He tried animated cartoons. Walt Disney was better at that. We were doing newsreels in movie theaters. He started the first newspaper syndication operation. He got us a little bit into radio. We still own a few stations. And he lived to 1951, and around 1948 he bought one of the first television stations in Baltimore, Maryland, WBAL we still own that to this day.

Steven Swartz: So I think we got from him this sense that, you know, we don’t give up on anything we’re good at. We try things. If we’re good at it, we stick with it. Thus, we’ve stuck with newspapers and magazines, despite the fact they’re much tougher businesses today. But, but constantly look to take your skills to adjacent areas of faster growth. So today we are a big television operator. We own 35 stations across the country. He he died in 1951. He was such a larger than life figure that for a while there, I think the company kind of stayed basically the same. And then a man named Frank Beneke in 1979 became our CEO and really channeled Mr. Hearst everything that Mr. Hearst had put in the company and started expanding us again. So we and ABC, when it was a standalone company at the time, now owned by Disney, of course, started what became the A&E History and Lifetime channels. The relationship with ABC, which became Capital Cities ABC, led us to have the chance to buy 20% of ESPN US back in around 1990, but we also came to own through various acquisitions. I don’t think it was ever a core focus of the company. We came to own trade magazines, so we owned not a lot of them, but we owned. You think back in the 60s, 70s, we owned a magazine called American Druggist for pharmacists. We owned a magazine called motor for Car Repair Mechanics. We owned. And we still own a publication called Floor Covering Weekly. The name says it all carpeting.

Tyler Mathisen: Where do I sign up for that?

Steven Swartz: But, but there was kind of a gradual evolution where some of our publishers decided that they would be better off, gathering data about the industry that they were in, the pharmaceutical industry, the automotive industry, and they would publish it in big books. But then when the internet came along, they put they put that information online and started charging a subscription. Now, we were still a consumer media company, so it took us a while to say, hey, these green shoots. And, you know, as technology was clearly changing the media business, we said collectively as a board, we’re going to build up this other area. So today, you know, we haven’t we’ve continued to acquire media properties, but today media is about 40% of our profits and 60% now comes from these green shoots, which have grown into a very large portfolio of B2B and medical data and software companies, the biggest being the Fitch bond rating business. It’s the Fitch Group, because Fitch has some other businesses, but it is one of the three major bond rating houses across the world like Moody’s and S&P. We also own six healthcare data and software companies and a number in the transportation area aviation, trucking and automotive. So those are now 60% of our profits. But before you think, oh, this is just a conglomerate. Really, if you think of the, the original business, the San Francisco Examiner was a, was a vital source of information. And particularly when Mr. Hearst was editing it. Entertainment. Okay. Information and entertainment. 1887 I would say today, all of our B2B businesses are either vital sources of data or software that helps companies or hospitals or whatever manage their data, their data. And the rest of it is. And of course, we’re still in the newspaper, magazine, local television, which is information. There’s also entertainment there. So I would say today, as 139 years later or earlier, we are still an information and entertainment company. It’s just that we have. And one of the things that has allowed us to endure is that we have continuously reimagined what news and information and entertainment is.

Tyler Mathisen: And how they all fit together and.

Steven Swartz: How they all.

Tyler Mathisen: Fit together under one, as you described it. I was thinking this is a data and and information company.

Steven Swartz: And entertainment.

Tyler Mathisen: That has entertainment and a, and a big consumer media wing. You have since since you mentioned it, you have recently invested in newspapers, most notably in Texas with the Houston Chronicle. Dallas Morning News have been recent acquisitions.

Steven Swartz: Well, we’ve owned the Chronicle since, I think, 1987 in Houston and the San Antonio Express News. Mr. Hearst bought. Well, Mr. Hearst bought the the the the San Antonio Light, Rupert Murdoch owned the San Antonio Express News. And when his empire was going through a restructuring in the 90s. Frank Beneke, who actually started his career as a very young man at the San Antonio Light as our CEO many years later, was able to buy the San Antonio Express news for us in the 90s. So we already had a big stronghold in Texas newspaper strong footing. And last year, both two great newspapers, the Dallas Morning News and the Austin American-Statesman, came up for sale. And we were able to acquire those. We’re very proud of them. And a couple of days ago, the Dallas Morning News won a Pulitzer Prize, as did our San Francisco Chronicle. So we’re very proud.

Tyler Mathisen: Congratulations.

Steven Swartz: Thank you.

Tyler Mathisen: So a lot of people see the newspaper business as uninvestable a relic. You clearly don’t. Why not? And. And what do you see as the future of newspapers? Are you buying those newspapers because you like the idea of having a newspaper that’s delivered onto someone’s doorstep in the morning. I still have it with The New York Times, but most people don’t. What do you see in newspapers and what’s the future of them?

Steven Swartz: Well, first of all, our company, our board, both our management board members, our Hearst family board members, our our chairman, William Randolph Hearst. The third Will Hearst started his career as a journalist. He was the publisher of the San Francisco Examiner when we owned that. We eventually bought the more dominant paper, the Chronicle in San Francisco. So they’re his family and our management. You know, as I said, Frank Beneke, who was my predecessor as CEO of Hearst, got his start in the newspaper business at the San Antonio Light when he was like 17 years old. So we love the newspaper business. We also feel a very strong connection, I should say. Another Hearst family member, George Hearst, is our publisher at our Albany Times Union. So we believe in the civic responsibility of a newspaper. We’ve been doing it a long time. It is. It is not the best business. Quote unquote. If you want to look at growth or margins. But we, we, we run our papers very well. We invest heavily in the journalism. We don’t want to own a paper that has not served the community well. Both the Dallas Morning News and the Austin American-Statesman, we felt, were great papers. You know, the the family that had started the Dallas Morning News continued to own it through a public company vehicle when we bought it. And the head of that family, Robert Deckard, Frank, and I had lunch with him yesterday in New York. So we believe newspapers can be a decent business if they are run well. And if you continue to invest in the community and in journalism. But we also believe it’s a civic mission of ours, going back to the original mission of the founder. And we’re a privately held company. And we have generally, over the last many years been able to generate record results. But by being a private company, we can do some things that perhaps a public company wouldn’t be able to do.

Tyler Mathisen: I want to get to that in just a moment, but let’s turn back the clock to the young Steve Swartz and and tell the.

Steven Swartz: You got to go way.

Tyler Mathisen: Back if you want to go. That goes way back here. Where did you grow up? What was your family like? Where were the initial seeds planted that led you first to Harvard and then very quickly to Dow Jones as a journalist, you, like many of the people who have been in high executive positions, as you just mentioned at Hearst, come out of a journalism background as as you did what what appealed to you about journalism and how did those seeds get planted and by whom?

Steven Swartz: Well, I grew up in the suburbs of Philadelphia. My mom and dad did not get a chance to go to college the way I did. So they both worked in a Boeing plant that that makes helicopters. And that’s where they met. And you know, them and my sister and I, you know, had good family life. We were we were very interested in public events. We would watch, you know, the action news at 6:00 together. I would then watch, you know, Walter Cronkite at 630 on CBS. I would read the newspaper every day. We would discuss a lot of current events in politics. So I, I developed a love through, through my family and just through my own interest in the news of public policy and current events and whatever.

Tyler Mathisen: And the 60s and 70s were a time when there was a lot to talk about.

Steven Swartz: You know, I was one of the few kids staying in during the Watergate hearings and actually watching him that, that that, that summer, the fact that I wasn’t all that good at sports probably played some role in that, but me too. But so I just as I was growing up, I, I just wanted to either be in public policy, perhaps in in politics or in government service. But I also was fascinated with the role that journalists played, obviously, Katherine Graham and, and Woodward and Bernstein and the New York Times and, and CBS, Walter Cronkite, Dan Rather. So as I went to college, I was trying to decide government service politics or journalism. And you know, both would have been great. But, you know, if I was going to do the government service, I was going to do that lawyer and then try to go in and out of government. And I got a chance to take introduction to constitutional law with the great Archibald Cox, one of the great figures of the Watergate era, one of the great law professors of all time. And I had trouble staying awake in class. And I said to myself, if if I can’t get through Marbury versus Madison, I probably shouldn’t go to law school. And so I did it. I also came to feel that I just wasn’t partisan enough to truly have a career in that thing. I mean, others have done well. One of my classmates was Tony Blinken. Obviously, going that route has obviously worked out so well for him, and we’re very proud of him becoming secretary of state. So I and I love journalism. I was doing it, I was, I started at the, at the, the newspaper, the Crimson, I was the news director of the radio station and got an internship at the Wall Street Journal between my junior and senior year. And a couple of weeks after that internship ended, I got a call at the, at the radio station from Norm Pearlstine, who was the new editor of the Wall Street Journal, offering me a full time job. And I took it.

Tyler Mathisen: It’s funny, my my sort of interest as a young man were very similar to yours. I grew up around D.C. and at the dinner table at night. We talked about current events. I was a consumer of the Washington Post and so on and so forth. And I thought, like you, that once I got out of the University of Virginia, I would go to law school and I’d end up in a law firm in D.C. or working on Capitol Hill, as my father did. And then this journalism career interrupted it. And I found it really, really interesting. I thought the life of inquiry really suited me well because I was curious. I wanted to know. And I assume that’s the way you were, too. What did you learn about the world of business or about leadership during your years in journalism? At The Wall Street Journal at Dow Jones, where you became a very young page one editor, which is sort of one of the capstones, one of the best jobs in journalism. And how much of the journalist’s toolkit have you brought forward into your life as a business leader and now as a CEO?

Steven Swartz: Well, I must confess that I, I, I wanted to pursue more political journalism. That’s what I think originally thought. I tried to get an internship at the Boston Globe. Couldn’t couldn’t get it. And then I looked at the internships for the New York Times and The Washington Post, which obviously I also had some interest in. The interns didn’t actually get the report, but the Wall Street Journal interns, if you got one of those, they let you report that summer. And I’m like, well, I’d really like to do that. Not that interested in business journalism, but, you know, and then I really became fascinated by it. The and business in general, the, the strategy of business the wins and losses and the role that business plays not only in employing people in the economy, but the philanthropy and everything that that a great corporation does. So I just became very excited. I got a chance to meet a lot of interesting people. One of my first assignments, I was sent to the Philadelphia bureau because the Journal could afford a Philadelphia bureau at the time. And we covered general assignment, the Pennsylvania, Maryland, new Jersey, and including that was the Atlantic City casinos. So I was signed that as part of my assignment. And one of the people who I had to cover who it won’t surprise you. I actually would call me frequently as a 22 or a 23 year old reporter was an Atlantic City casino operator, now the president of the United States.

Tyler Mathisen: Yeah. How how tricky or or accidental versus intentional was your transition from journalism? Foot soldier, a guy who was actually out writing, editing, writing headlines to editorial leader and then into the C-suite? What did you have to learn from scratch about business, and what were you not prepared for when you moved into becoming an editorial leader? At first, a magazine, we’ll talk about it in a minute called Smart Money, which was a personal finance magazine joint venture between Hearst and Dow Jones.

Steven Swartz: Well, I’ll confess the story sounds better if it was accidental, but I really, even in college, thought if I’m going to go into journalism, if you’re going to dream, you should dream big. Right. So I’ve from the start said, I want to be the publisher or the CEO at some point. I mean, while I loved Woodward and Bernstein, I really got the impression from All the President’s Men that Katharine Graham was the boss. And I was like, I’d like to be.

Tyler Mathisen: You were right about that.

Steven Swartz: I’d like I’d like to be the boss someday. And in fact, when I was in my early couple of years in the Philadelphia bureau, the CEO of Dow Jones, which owned the Wall Street Journal, and it was a public company at the time, came to visit a really wonderful gentleman named Warren Phillips who, who, who wrote his memoirs many years later. And I didn’t really remember this, but he wrote in the book that when he went and visited the Philippine Bureau. One of the youngest or one of the newest hires actually told him that he wanted to have his job one day and got the impression that this person wanted it sooner rather than later. And that was that. That that was me.

Tyler Mathisen: The kinds of things you want to keep a little quiet.

Steven Swartz: So that was me. So I always that was always in the back of my mind and my, my bosses at the Journal, Peter Kahn, who was the publisher and CEO, and Norman Pearlstine and Paul Steiger, I mean, these are some of the great names in journalism. So I was very fortunate. And Jim Stewart, who was my boss as page one editor. I mean, it just had just phenomenal people that I was able to work with there. They they asked me early on what I wanted to do. And I remember Peter saying, if you wanted to, if you aspired to be the editor, you should do a foreign correspondent thing after editing on page one. But I said, you know, I’d really, really rather aspire or try to be on a path to be the publisher. So then Hearst and the Wall Street Journal had discussed doing a magazine together, and they they centered on personal finance. So one day Norm Pearlstine called me and he said, we’re going to start a personal finance magazine and you should run it. And I said, well, but Norm, you know, all my money is in a money market account. And I don’t I don’t really know anything about personal finance. And he said, well, that’s perfect because we want to take a new approach, not, not as new as putting the money in the money market account.

Steven Swartz: You’ll have to learn a little bit about that. So I got, you know, fabulous people to work with me. He was unknown at the time, but a guy named Jim Cramer was one of my first associates on. And I got to know him through Jim Stewart, the great New Yorker writer and author and New York Times columnist, who also helped me shape this magazine. And the reason why I took the job is Norm. And Jim said, you know, Steve, if you if you aspire to be a business leader. This is a new product that the Wall Street Journal starting. We don’t start many new projects. You’re having the ability to start it. You should do this. And so I, I, I took it and, and it worked out. We, we were a magazine of the year. We won two national magazine awards for a while. It was a good business. But at the end of the day, I think the Dow Jones, the Wall Street Journal came to feel it was too competitive with its core business and that they never should have joint ventured it. And then they actually ended up buying a competing product called MarketWatch. And then finally her sold smart money to Dow Jones. And then it got shut down.

Tyler Mathisen: Yeah. It’s interesting. Our, our paths, our career paths curiously intersected because during this time I was working at money magazine, which was the incumbent and smart money was the upstart and I think quite, quite strategically and intelligently aimed a little bit more up market than Money magazine was. Money was a little more middle market, but but smart money. And Steve and his team, which was populated with some really great folks, was, was a formidable competitor. I wonder what it was like to be thrust as you start this new product between two very distinct cultures as as these this was a JV between two companies that had family ownership as well, the Bancrofts at Dow and the Hearst’s at Hearst. Was it hard to know where the landmines were, where the sensitivities were? What how did you how did you feel your way as you did this and navigated what can be pretty treacherous shoals.

Steven Swartz: Well, bottom line, both companies were. And and you know, obviously Dow Jones now as part of the Murdoch empire is still really dedicated to quality and and product. And so in that ways, it was great, but they were very different. The journal was, you know, laser focused, some might say maniacal, too, narrowly focused on the Wall Street Journal and and the prestige of the Wall Street Journal. Hearst was much more entrepreneurial, willing to try new things, much more diverse and also much more civically engaged. I came to see the Hearst executive just out in the world more. And as I said at the end of the day, the magazine and the venture and, you know, and online was, was quite successful for some time. But then, you know, finance was the core subject of, of, of Dow Jones, whereas it was just a part of a very diverse Hearst empire. And so I think that bothered the journal people that it was a joint venture and that eventually hurt it. But, but for, for quite a while.

Tyler Mathisen: You must have learned a lot there about innovation and risk taking and the Hearst culture being more innovative and risk taking, the Dow Jones culture being more conservative and laser focused. So there was a tension between tradition and experimentation a bit. Yeah, yeah, a bit in in that case. So so anyway, Hearst is now, as you said, about 140 years old, still owns what, 30 dailies or thereabouts, 30 dailies. Increasingly, it’s a broadly diversified business to business company. Can you reflect on what it means to lead a company that has endured for well over a century, and how do you keep the heart and soul alive, even as you add new companies? You’ve done a lot of acquisitions. You add new companies. How do you keep the heart and soul, the culture alive as you add new companies and sometimes painfully have to jettison legacy ones?

Steven Swartz: Well, I think one of the keys to the endurance goes all the way back to the founder when when he was setting up for his passing and structuring the company for survival, he created this trust and he decided to have yes, he had five sons. So he set it up that there would be five family trustees, but he also provided for management trustees as well. And what that has done. And he wanted his trustees to serve for life. So what that has done is really helped us maintain the culture over the years, because we have trustees, not some current management like myself, but but but others who have just been with the company forever, who built the company, as I said, Frank Beneke is really like a Warren Buffett like figure, the way he transformed Hearst. He also has also great sayings and wisdom. He wrote a phenomenal book about leadership and life called Leave Something on the Table. I highly recommend it to to everyone, which kind of gets at our culture. But people like Frank, his longtime deputy in running the company, Bill Maher, passed away last year at 95. Gill would come into the office every day. Frank comes into the office every day. I talk to him every day about where we’re going. Now, you could say if you have people serving that long or and also we have our Hurst family members that will Hurst has been a trustee for many, many years, our chairman, as have several other members of the Hurst family. You could say, oh, that would get you to just keep things the way they were. What has been phenomenal, and this is just the people. But I think it’s also channeling back to what the founder would have wanted. The whole company is rooting us on to keep changing, keep, you know, not losing our culture, our values, but to keep looking for new opportunities. Don’t sit still. That’s why we’re still in business.

Tyler Mathisen: What is the Hurst culture and how do you keep it alive and salt it across multiple business lines that that really are not particularly related one to another? Well, transportation management is one thing. Medical data is another magazine’s a third.

Steven Swartz: I would say part of it, part of it does stem from William Randolph Hearst, this sense of mission. I mean, again, he didn’t have to work. He was already rich. And the notion that he wanted to dedicate his life to, to doing journalism, and he really aimed at the working men and women despite his own circumstance. He went for afternoon papers. Those were the working men and women’s papers, because they were in the factory too early in the morning to read the morning paper. Right. So we got that sense of mission, I think, from him. And I would say that goes to all of our businesses. What is a bond rating do tries to help people understand the relative safety or risk of a bond. We’ve got a we’ve got a business camp that helps helps decide whether a jet plane or a helicopter is safe to fly. We have a business in Oregon system that helps diagnose trucking issues so that that the trucks are safe to be on the road. So there’s a very strong sense of mission to the company. And of course, our health care businesses and our journalism reflect that. So mission number one, but I would say also for Mr.

Steven Swartz: Hearst, this sense of don’t sit still, don’t give up on what you’re good at, even if it goes through hard times. He stayed through. He had some hard times, too. He stayed in the newspaper business, the magazine business, whatever. He tried other things that didn’t work out. But then also keep looking. So this this diversification, I think of the culture comes from him. But, you know, I would say Frank Minnick really in his, I don’t know, I think he’s been with the company some 70 years now, has played a huge role in shaping the culture and his book, Leave Something on the Table. I think he named it that because what he was saying is you, you know, have a win win. You know, if you’re selling advertising, make sure the advertiser is going to be happy as well as we’re happy. If you’re doing an acquisition, make sure the company that you’re buying it from feels they got a fair deal, too. And what that does is that’s not just being soft, that’s good business. Because one of the things that has helped us over time is that people want to partner with us because we have a reputation of being a good partner.

Tyler Mathisen: Now you can be a good partner, and if you come into the Hurst family, the people are going to be taken care of.

Steven Swartz: Exactly.

Tyler Mathisen: The business is going to be run.

Steven Swartz: Exactly. And I don’t want to leave this without saying, you know, integrity is key. And I’ve heard Warren Buffett talk about it. We talk about it all the time. I, I meet with new employees by Zoom because we have 24,000 employees around the world every month or every other month, depending on how many new people we’ve added on. But we usually have close to 200 people on the Zoom. And I always talk about, you know, the Wall Street Journal or the New York Times Test. You think about what you’re doing for hers today? And if it were on the front page written about and your your parents read it, your friends read it, your community members read it, your family read it. If they would feel good, which they should, fine. If they would even say you know.

Tyler Mathisen: What’s going on.

Steven Swartz: Here, don’t do it. Because, you know, Frank says this all the time. I say this all the time. We can always get some revenue back. But getting your reputation back. That’s a tall order. So again, really focusing on that. And that’s how a company becomes 140 years old.

Tyler Mathisen: So strong sense of mission across multiple business lines that are very distinctive and different from one another. Mission and business discipline, mission and the business results. I could imagine sometimes might come into tension. What do you do when that happens? How do you how do you think about that?

Steven Swartz: Well, you know, you got to put the mission first. But I think that that’s easier said. If you have a fortress balance sheet and you are, you’ve made because I look you look at during the pandemic, we said, you know, in this in this world and particularly in this country, whether you like it or not, most people get their health care from their employer. So there can be no layoffs. During the pandemic. We had businesses that lost money during the pandemic, but we were able to say no. Now, do we have times when one of our companies just the world changes and we just have people that we no longer need doing a job that just doesn’t make sense anymore. Yes, we’re not immune from that. But we said during the pandemic, you everyone stays because everyone needs the health care. Now, there were other companies that were in such difficult shape, they had to furlough people or lay off people or whatever, and we were able to do that. Yes, we were good people and we focus on our mission. But a lot of other people were good, too, and had to make choices because they were in difficult financial shape. They had too much debt. They, they just did not have that rainy day fund. But we very much maniacally focus on having a fortress balance sheet plenty of cash in the bank so that whatever the world sends at us, we will get through it. And that, and not having the pressure of quarterly earnings, I think contributes to something where you say you got to put the mission first. That said, we’re very competitive. We we compare ourselves to any public competitor that we can look at. And, you know, we’ve we’ve had, I think, extraordinary business results at the same time.

Tyler Mathisen: So you talk about the fortress bank balance sheet. I don’t want to get too much into the business weeds here. This is not the booth school, but but not many companies have done 14 large acquisitions over the last decade as you have, and taken on no debt. How have you done it?

Steven Swartz: Well, we’ve we’ve spent, yes, net debt in in the last 15 years, we’ve made about $19 billion of acquisitions, about $4 billion in the consumer space and about 15 billion in the B2B space. You know, we’re just very fortunate our businesses generate a lot of free cash. We’re very fortunate that the acquisitions we’ve done have, by and large, done what we hoped they would do. So they are generating a lot of cash. You know, we have borrowed occasionally not so much to make an acquisition, but when rates were just super low, we added more dry powder. But when one says one has no net debt, that means you have so much cash in the bank. That is, that is that is not tied to borrowing that you could pay off your borrowings and we could pay off our borrowings this morning and still have a massive cash hoard for, you know, a rainy day for difficulties, for for recessions and stagflation or whatever the world throws at us.

Tyler Mathisen: Let’s talk a little bit more about diversification and, and how and when you came to the conclusion, not that there wasn’t diversification within Hurst before you took the top job, but how and when you came to the to the realization that diversification was an imperative and not just a choice. And can you take diversification too far? In other words, is there a point at which diversification becomes dilutive rather than restorative and and a sign of a company’s resilience?

Steven Swartz: Well, as you say, the company was diversifying from William Randolph Hearst Day. And you know, and certainly during Frank Beneke’s almost 30 years running the company, we were constantly diversifying. I and, you know, the seeds of, of the B to B started with the trade publishing, which goes way back. And our first investment in Fitch goes back to 2006. So we were doing this for a long time. I, I recall when I got the chance to join senior management, which was to be Frank’s deputy as chief operating officer in 2011. The. The first conversation Frank and I had, we both agreed that we were committed to media and we were going to be a media company forever. But at that time, we had already seen newspapers and magazines and other things like Yellow Pages or whatever. And the book industry hit by.

Tyler Mathisen: The Yellow.

Steven Swartz: Pages.

Tyler Mathisen: I haven’t heard those mentioned.

Steven Swartz: Right.

Tyler Mathisen: So the members, the yellow pages in this room.

Tyler Mathisen: Everybody remembers the Yellow Pages.

Steven Swartz: We we still own a few. We don’t make a big deal out of it, but we. We still own a few. But look, we saw all of those businesses by. When we’re having this early 2011 conversation, all of those businesses had been hit by technological change and disruption. So what we said to ourselves and then to our board who immediately embraced it, or again, our chairman, Will Hurst, and then our whole board is that, you know, we were at that time mostly a television company with ESPN, A&E history and Lifetime and and our stations, and they were all killing it. But if technology had done what it was already starting to do, new technology was going to come to the top. We didn’t know. We didn’t anticipate Netflix and that they were going to go from DVDs in the mail to, you know, to the streaming powerhouse they are today. But we figured something has to happen. You know, Frank’s always reminded trees don’t grow to the sky, right? So so something was going to happen, our television business. And then we were going to be in some difficulty if we didn’t do something else. So we had this, this B2B, which at the time was probably a little under 10% of our profits. And we said and our board immediately agreed that we need to we need to you know, in my own sense when when I became a CEO in the middle of 2013 again, with Frank’s partnership, you know, it would be great if, if it could become 5050, you know, in, I don’t know how many years we B2B.

Tyler Mathisen: I’d feel better.

Steven Swartz: I feel better. We were we were about 928 at the time. I, we thought it would be better if it was 5050.

Tyler Mathisen: And you are aware now.

Steven Swartz: We’re 60 B2B and 40.

Tyler Mathisen: In terms of revenues or in terms of profits.

Steven Swartz: In terms.

Tyler Mathisen: Of profits, in terms of profits.

Tyler Mathisen: Your biggest profit maker is the bond rating business, right?

Steven Swartz: Fitch is, is our biggest business.

Tyler Mathisen: Yeah. Let’s talk a little bit more about the structure of, of, of the Hearst Company as a private company, as a company that is owned and really reports to that trust. What has that structure permitted you to do or not have to do. And and what does that what kind of extra responsibility does that place on your shoulders as you report to a to a family trust? Is your job different from that of a of a traditional CEO?

Steven Swartz: Well, I think I don’t know if I focus on me, we as trustees, I think, have an extra special, I don’t know, prudence or whatever, that we are running a trust. We are supposed to make sure that it lasts for future generations.

Tyler Mathisen: Are you as much a steward as you are a CEO?

Steven Swartz: Or, you know, you could say that. And we certainly, you know, because the company is 139 years old and whatever you do feel that that, you know, you, you’ve got a brand reputation, you’ve got all these great businesses that have been. So you feel that weight. But but this company has transformed, as we just talked about. So it’s not like we’re not doing anything. I just think we. I feel that there’s an extra prudence we’re not going to take. You know, I think some public companies feel, well, you know, you’re all grown ups. You gave us the money. You know, we’re going to we’re going to or private equity. We’re going to take some real risks here. That’s not what we get up in the morning thinking we’re going to take some real risks here. What we say we’re going to keep building a great company. And as you can see, we keep investing and we’ve transformed. And we you know, who knows what generative AI we may have to transform again. But so I think that there’s a special prudence and a special responsibility, but that has not kept us from transforming the company.

Tyler Mathisen: So there’s there’s a kind of additional layer of moral responsibility.

Steven Swartz: I think so that.

Tyler Mathisen: Derives from the structure.

Steven Swartz: I think so of.

Tyler Mathisen: The way it is. So let’s talk about that structure a little bit more. It has stood the test of time by any measure and in fact has served the company extraordinarily.

Steven Swartz: It’s extraordinary that Mr. Hearst thought all this through and gave us the ability to do what we do. And I’d like to think if he could come back, that he’d be pleasantly surprised.

Tyler Mathisen: Well done.

Steven Swartz: The company has done. Yeah.

Tyler Mathisen: So there are plenty of examples. What makes you think that the the structure will endure? Because there are plenty of examples of media companies, particularly that have been family, either family run the Washington Post time Inc going back to lose Murdoch. Where, where the corporate structure has those companies have succumbed either to the temptations of the public marketplace or inter-family factions, factions, or just succumbed. How can you be sure that in ten years from now, we won’t be seeing an HBO sequel to succession built on the Hearst Corporation?

Steven Swartz: Well, first of all, we’ve had tremendous support from the Hearst family and the the partnership between management and the family for the betterment of our employees, for all of the communities we serve, all of the constituents that we serve has really has really worked great. You know, we don’t need to get too deep into trust law, but trusts do not last forever. Will likely last, you know, 20 or more years. So there’s nothing. So at some point, the, the trust will end and, and then there will have to be some restructuring. And I don’t know that there’s a law of public markets because we have, we’ve been able to do everything we can without being public. And I think we and the, the both management and our Hurst family trustees and board members feel that, you know, we are better off. We can do everything we want and more, being private. That said, when trusts end and and individual family members inherit shares, there have to be liquidity mechanisms. So sometime in the very distant future, there may be some public vehicle that would need to be created. But that’s that’s a long way off. We talk about it a bit, but it’s, it’s not it’s not in the near, near term.

Tyler Mathisen: Let’s, let’s talk about trust in a different sense. And that is the fact that that as I think about all of Hearst’s businesses, the one thing that is common to all of them is that they depend on trust. The readers must trust your magazines, your newspapers, the viewers must trust your television stations. The analysts that are using Fitch’s bond data have to trust that it is is accurate. Same with the medical data. The transportation information that you have. They have to trust you. How do you build and maintain trust across such disparate domains?

Steven Swartz: Well, I mean, this is this is part of an enduring legacy. I mean, we’ve been we’ve been doing this a long time. Our newspapers have been at it a long time. Our magazines have been at it a long time. Fitch is, is, is over 100 years old. I mean, you know, these businesses have been doing it and there has been a culture again, of integrity of, of, you know, you, you were you inherited this brand from others who came before you, who built it, don’t screw it up. And then we also have that trusty you know, you know, as I said, Frank’s in there every day making sure I don’t screw up what he built. You know, and so we, we continue to, to reinforce that. I do think you’ve hit on a question that I get a lot is, how are we going to do in this world of generative AI? And you just hit the word trust. You know, because yes, can, can, can you call up a language model and ask it about a bond? But do you really trust that information versus Fitch’s 100 years of doing this? And, and, and the Fitch analysts who’ve been doing this forever. And yes, are we going to be enhancing our processes with with models and, and with data that that and technology, of course we are. But the fact is, I think businesses that are trusted and have proprietary data, proprietary reporting will, will endure and actually will take generative AI with human supervision and make their products better.

Tyler Mathisen: One of the things I just learned about Steve is that he can read upside down.

Tyler Mathisen: Because my next question literally was on artificial intelligence.

Steven Swartz: Well, but you brought it to me because you said the word trust. And clearly trust is part of our whole business. But trust is, is one of the keys to the realm of generative AI. That what you are doing is trusted.

Steven Swartz: Yes.

Tyler Mathisen: So how is Hearst using AI today and what ways, most importantly today? How may you use it five years from now to the extent that you can forecast it? And how is AI going to affect truth and trust?

Steven Swartz: Yeah.

Steven Swartz: Well, again, I think it puts a big premium on on data information analysis that is trusted. It’s gone through a time tested process, right? So that’s what our business is do. We are using generative AI in, in, in as many aspects of the business as we think is, is prudent without it distracting us from the fact that we were doing pretty well before generative AI came along. Right. So you clearly look for ways that it can make our people more efficient, faster in gathering data sources. One of the things that’s amazing about an anthropic run or a GTP, is that it will find sources that, you know, we maybe never thought to look at as we’re looking to, to do research. One of the things that, that I find interesting and Mitch Scherzer, our CFO, usually does this for me when we’re doing an analysis of one of our businesses. He takes their many years of data and all of the memos that they’ve written us over that and feeds it into Anthropic. And it comes back with questions that we should ask in the meeting. Now, we’ve had our own questions, but every now and then I’m like, oh, I didn’t, I missed that or that’s really interesting. Now again, you validate it, it comes up with you don’t just say, oh, okay, this has to be true because anthropic said it you clearly, but it has definitely enhanced our ability to analyze. It’s made us faster. And then also we are looking using it to make our products better for those who are using our products.

Tyler Mathisen: Where is the the greatest sensitivity within the organization with respect to AI? Is it the the writers and editors of the magazines? Is it where is it?

Steven Swartz: I think the greatest sensitivity is cybersecurity with what, you know, with anthropic has come out with. And, and we’re very hopeful. You know, not only did they announce that they had a supermodel that could break into just about anything. Of course, last week they announced that they have a model that could potentially stop people from breaking into. So, so look, I mean, I think I think technology, generative AI has to be part of the solution to cyber security. But the fact that it is making the bad actors faster means that we have to patch our errors, our old code, faster than we ever, ever did before. So I would say that’s our biggest concern.

Tyler Mathisen: How do you think in today’s world? How do you think about maintaining excellence and leading at a time when technology is ascendant and trust in institutions generally, and maybe particularly in media institutions, is declining?

Steven Swartz: Well, it is it is tough in media and this is good and bad. I mean, you know, it has democratized media in many respects. There are some great single practitioners on Substack doing doing great work.

Tyler Mathisen: You don’t have to have a publishing infrastructure around.

Tyler Mathisen: You don’t.

Tyler Mathisen: To get your message.

Tyler Mathisen: Out there.

Steven Swartz: And, and, and, and look, and there are influencers who are in various categories are making a really good living on Instagram what have you and many respects that’s positive that that does that make the job more difficult for for.

Tyler Mathisen: Do you ever look to acquire an influencer?.

Steven Swartz: You know, I mean we, we work with influencers. But and, you know, have we looked at actually acquiring an influencer business? We’ve looked at it, we haven’t done it.

Tyler Mathisen: Yeah.

Tyler Mathisen: I want to be an influencer.

Steven Swartz: I think you could.

Tyler Mathisen: I think I could be.

Tyler Mathisen: I wonder, let’s go back to, to the journalism origin. How do you use your journalism background today as a CEO? Does it does it help you analyze problems? Does it. Does it help you think about solutions?

Steven Swartz: I think so. I think the skills that a journalist brings you have to master a lot of disparate information very quickly. Thinking back to my old days as a reporter, I, I had a chance to cover Wall Street for a couple of years. And when when you write a story with your name on it, the whole world of Wall Street and beyond reads it. And if you get anything wrong. I mean, you got the ultimate transparency there. So you have to you have to be accurate. You have to be right. You have to master the information. You need to talk to a lot of people. You need to come to conclusions of what is true, what is factual, and then you have to lay it out very quickly and cogently. And so I think communication skills of a journalist are important. The ability to ask tough questions, the ability to synthesize information are all good. I think, though, that if one wants to go from being a journalist to a business leader or from being a journalist to to anything that takes a lot of learning, one has to move over early. You know, I think my last job as a journalist, when I was working on the page, one staff at the Journal ended when I was 27, when I took the smart money. So I had moved into business by 27. So I think that I think that’s important too, that you don’t you don’t, you know, stay in one thing until you’re quite long in your career. And then you say, oh, now I should run.

Tyler Mathisen: Now I’m going to pivot and do something different.

Steven Swartz: I think I think that would be quite hard.

Tyler Mathisen: Yeah.

Tyler Mathisen: I mean, I just want to emphasize the idea that what you did at age 27 is that is prodigy kind of stuff, man. That’s it. You know, you’ve been playing in the big leagues for a very long time. I think I can sense the answer to this. I think often in terms of how much of careers are intentional and how much are accidental. There’s accident can play a role, but in your case, it seems like your career was more intentional than accidental.

Steven Swartz: Yeah, I think so.

Tyler Mathisen: Let’s talk a little bit about the role of business in society, particularly in social institutions. You’ve been the chair of Lincoln Center.

Steven Swartz: Yes.

Tyler Mathisen: Been on the board, maybe the chair of New York Presbyterian Hospital.

Steven Swartz: Vice chair, vice chair of Presbyterian.

Tyler Mathisen: Of New York Presbyterian. You’ve been the chair of the Associated Press?

Steven Swartz: Yes.

Tyler Mathisen: Why is it important for businesses and business leaders to help sustain the institutions that underpin society?

Steven Swartz: Well, this is another thing I’ve learned from from Frank and and my other predecessors at at Hearst. We we have just always felt that there was a tremendous responsibility for the large companies because they inherently have resources to try to play a helpful role in, in the communities that that they live and work. So our headquarters is in New York. Yes. I’m the chairman of Lincoln Center now. Frank was the chairman of Lincoln Center at one time. Frank was the chairman of New York Presbyterian. I’m now vice chairman. So we we have there have been certain institutions that our company, being a long serving company, have, have, have partnered with. But we just very much believe we we have a very. One of the things that is great about New York, and I think Chicago is the same, is that we have a very strong business community that continues to stay invested in the city. I’m the immediate past chairman of the partnership for New York City, which is our CEO group in New York City. Kind of like the the Business Roundtable for the country that meets in Washington. We have a very strong group at the partnership. Albert Bourla and Rob Speyer, Albert of Pfizer and Rob of Tishman Speyer are the chairs now. I mean, we’ve got, you know, Jamie Dimon, Steve Swartzman, Henry Kravis. The CEOs of New York are very committed to staying involved. And I think that’s key when when businesses say are the politicians are getting too liberal, say if that’s what it is and, you know, we’re we’ll move to the suburbs or we’re going to move to.

Tyler Mathisen: Another or we’ll move to Miami or.

Steven Swartz: We’ll move to, you know, and look, there there are there are threats to that in many.

Steven Swartz: Cities, New York.

Steven Swartz: Helping ours. But, you know, you know, if you try to get a reservation at a good restaurant. Good luck. I have a son. He and his fiance pay an extraordinary amount for a one bedroom apartment in New York City. Because so many young people want to live in New York City. So I would say on the positive side, a lot of strengths. Obviously, Jamie just built a fabulous new headquarters for JP Morgan with the same great architect, Norman Foster, that built our headquarters. But yes, there are tensions there, there, there, there there in certain cities like New York, there you know, our, our, our, our fellow citizens have been electing a decent number of folks who have a very you know, left of center view of the world that does not necessarily make them welcoming or appreciative of business. And that puts some strain. And, yes, I mean, Jamie has said there are now, despite the fact that he his headquarters is in New York, there are now more JPMorgan employees working in Dallas than in New York. And, you know, clearly there have been companies looking at Miami and Palm Beach and Texas and and, and that’s, that’s troubling. But that’s something that we as a business community are not shying away from. We are trying to be actively involved in, in supporting, we do have a, we do have a pro-business governor in New York and she’s doing, I think everything she can to, to make it an environment. So New York’s got many positives. It’s a great city. A lot of people want to live there, but we have our challenges with the with the political system. Right now.

Tyler Mathisen: I want to turn to the audience for a few questions. With the 10 or 15 minutes that we have left. And as you assemble your questions, I’ll just ask you’ve mentioned Frank Banach a lot, and it seems to me that implicit in that is your sense that having a mentor and mentorship is really critical. It seems like it has been critical in your career.

Steven Swartz: I’m a huge believer in that. I say that any time I meet with students or anybody asks me, you know, I think mentors are great. And, you know, Frank has been my principal mentor, not only in business, but in life in general, but I’ve had some others. Again, in journalism, norm Pearlstine, you know, who ran the Journal and Time Inc. and Bloomberg editorially and the Los Angeles Times and Paul Steiger, who created ProPublica. John Mack Carter, who was one of the legends of the magazine business back in a time when when men actually sometimes were running women’s magazines, he edited many of the so-called Seven Sisters and had an incredible run at Good Housekeeping. I remember when I first met him, I then was in a supermarket and he said, This is John Mack Carter and IL two. There’s a. So he was he was a legendary magazine figure. And he taught me a lot about how to edit a magazine, because when I came over from the journal, I knew newspapers, but I did not know magazines. So he taught me a lot about that. You know, Frank and his long time partner, Gil Morris. I’ve been very fortunate, but I think it’s huge. Obviously, you have to earn it. You got to have a positive attitude and all that and be working hard. But but that’s that’s been, that’s been great for me.

Tyler Mathisen: There are two people with microphones. Let’s see you’re up there. Why don’t you go to the lady in the green top?

Audience Member: As you look upon your career, what are you the most proud of and why?

Tyler Mathisen: Now? That’s a good, tight question. I love that.

Tyler Mathisen: I love that. Keep that in mind, everybody.

Steven Swartz: You know, I’m proud that I get to do stuff that I enjoy, but that I really do think makes a positive difference. Both, you know, all of our businesses, I think, promote good practices, promote safety, promote, you know the protection of individuals. And so just really proud of the company, proud of all the employees that we have, all of our colleagues who have good careers and can take care of their families and, and all the philanthropic work the company is able to do because of, because of the strength of the company. So I would kind of say that.

Tyler Mathisen: The gentleman in the hat.

Audience Member: Thank you. My question is about the newspaper business. What, what, what do you think about print and what do you think about its role in civic speech? Can can newspapers still powerfully be sort of that arbitrator of of the news.

Steven Swartz: Well, I think for, for people of a certain age, and I’m certainly one of them, print is still my favorite medium. If I can get a print newspaper. And, and I do, particularly when I’m in New York. I will read it because, you know, we’ve, we’ve, we’ve had digital for a while now, but we’ve had print for hundreds of years and we’re pretty good at it. And so the serendipity of paging through the New York Times or the Wall Street Journal or the Financial Times, you know, we are in a lot of businesses. So they will be a story that I would have never put in my favorites or whatever, or digitally would have been sent to me that I’m paging through. I’m like, oh, I need to learn. I need to read that. So I still think print is great. And I think there’s still a strong audience that still loves print, however You know, the advertisers are really the ones that are out of love with print, you know, more and more every year. Not completely. And it’s because of the data. They they want the granular data. And I understand that. I don’t blame.

Tyler Mathisen: Them. The data.

Tyler Mathisen: About who’s consuming it.

Steven Swartz: Yeah. Who’s consuming it. What action did they take? And then the targeting I want to target exactly this person, this person, you know, obviously an ad in print. You’re not 100% sure who read it, if they read it, if they took any action. And so that has really hurt it. I think there’s readers want the print more than advertisers do now. We are still seven days in our major markets. And we charge a lot for it. And, and and so we will keep doing print until we absolutely can afford it. But I mean, if you look at the New York Times, I mean, I think they’re there now, something like 90% digital subscriptions. And that’s also because of the logistics of getting the times around the country. But I think, you know, we will keep doing print at our papers as long as we can because we believe in it. And we think a lot of our most loyal and passionate readers still like it now. I mean, obviously I do digital too. I think the optimal is, you know, you get up first thing in the morning, look at your favorite newspaper website or whatever, look at it at maybe midday before you take your go out to lunch, look at it at the end of the day to see if anything happened. But then when you want to deeply read, there’s nothing like the print. So I hope we can keep it going. So far, our readers have stepped up and been willing to pay enough to offset the loss of advertising. But you know, as as the world goes forward, I don’t know. We won’t be able to do it forever.

Tyler Mathisen: I’m a subscriber to the print version of The New York Times. This is the first time in my life I’ve been in the top 10%. I am feeling let’s go over to this gentleman right here in the blue jacket. Yeah, either either one. Thank you. Then we’ll come back to you.

Audience Member: Hearst is a unique company in that it’s always been run by journalists. I don’t know of another instance of that. And journalists, I would say I think many would say that are people who care about the public good. They go into the career because they want to affect the world in some way. And so you end up with a company. Frank, I got to know Frank a little bit in a former life. He’s just besides being a great journalist and business leader, a wonderful person, very just sweet, wonderful person. And you end up with a company then that will decide to we’re not going to furlough employees during the Covid because we just we care about our people. Extraordinary. How much of the culture of Hearst is owing to. You to think to business leaders who have come from the space of, of journalism where again, I think you care about the world.

Steven Swartz: I think that’s a, that’s a very good point. You know, again, it started. Mr.. With Mr. Hearst and has passed on through and through, Frank and, and certainly I believe that. But I mean, I think that our culture is is now ingrained in enough of our folks that if whoever my successor ends up being doesn’t come from journalism, I’m pretty confident they’ll they’ll keep the culture going because the culture is so strong. And look, there are other great businesses that are run by by Non-journalists who are also similarly, I think mission driven businesses help such as health care and what have you. But, but I do think that’s a fair one that, that journalists do really start with this notion of, of, of service and, you know, trying to look out for the, the powerless against the powerful and the like. And I think that does affect how one does one’s job when one gets to be a CEO.

Tyler Mathisen: Go ahead there. I’ll come on here to you too.

Audience Member: How do you balance the trust, the depth of knowledge of your example, Fitch analysts and so forth, all of that expertise against apparently changing consumption patterns defined by too long didn’t read tick tock, quick cuts, very short forms of consumption. So depth versus speed, if you will.

Steven Swartz: I think, I think, you know, the medium to some degree has to fit the subject matter. So we have a business called delish in our magazine company that’s one of the leading purveyors of recipes. And rather than doing them in print, like the print recipes, like the New York Times, which is fabulous. I love the times cooking site, but ours are quick videos, and then we do quick outtakes on Instagram and TikTok and whatever. And so we do that too, depending on the subject matter. But, you know, I don’t. One of the things that makes Fitch such a great business is not only do we have great analysts doing great work, but there are great people in the financial services industry who, who voraciously consume every, every word that Fitch writes to make sure that they’re making the right decision for their clients and for their own investments. So I think, I think it just depends. I think that clearly in a lot of our large newspaper markets, for example, we have a free site and a paid site. So in San Francisco we have SFGate, which which has huge penetration, one of the biggest sites in the country. And, you know, it covers lighter fare quicker news, perhaps more akin to a television station news operation, but then also does the kind of stuff that that that makes it unique. Like we have great coverage of the national parks. We think we do a better job covering Disneyland than the, than the, than, than the local folks do. So that’s the SFGate free site. And then there is the San Francisco Chronicle paid product, both in print and in digital. So we, we, we, we write that obviously for a more in depth audience, more investigative reporting, more long form. So I think, I think there’s still an audience out there a good audience. Look at how well the New York Times is doing for in Depth. And we have that at our major newspapers and at Fitch and our medical businesses and the like. But there’s also an audience for lighter fare, and we do that, too.

Tyler Mathisen: We got time for two more, and then I’ve got to go check my Instagram. You first and then you.

Audience Member: What are your thoughts on the companies that create the models using rags, which bypass paywalls to train the models? I know New York Times has taken a more aggressive stance and sued perplexity. But you have a wealth of data, you know, throughout the years. What do you think how that evolves?

Steven Swartz: I agree with you that that is quite troubling. And we try to block these companies, but they seem to be very good at getting around anything that we block. So at some point, there probably needs to be some regulation or some adjudication through a lawsuit. We haven’t done that yet, but others have been more aggressively going down that angle. But yeah, it’s, it’s troubling. It’s, it’s one thing, you know, we have, we have business arrangements with some of the large language models like OpenAI, where we do license them our stuff. And that’s great. But yeah, when you come and take it, particularly when it’s behind a paywall. Now, I know the fact that a lot of media organizations, including some of ours, were having their stuff out there for free. And then the question is, well, if you put it out for free anyway. But even there, yes, we put it out for free, but we were monetizing it through advertising. If somebody takes it and takes our ability to monetize it in a way that’s not really right either. So yeah, there are some troubling things. I think by and large, the whole move to large language models is going to prove to be good or cause more positives than negatives. At least I hope we can manage it that way. I think, particularly if I put my New York Presbyterian Hospital hat on with the ability to cure diseases. I was reading this morning about a breakthrough in in, in the ability to treat. And then there was another breakthrough in the ability with detection of terrible things like pancreatic cancer. So, you know, I mean, I think there are more positives than negatives, but but yes, having our stuff taken, scraped, even when we try to protect, it is troubling and long run that needs to be addressed.

Tyler Mathisen: Final quick question here in the person in the striped shirt. Okay.

Audience Member: The media industry is under siege from the executive branch. There seems to be more lawsuits for little things and big things. How do you, as a business entity approach that? And what about the chilling effect on your journalism?

Steven Swartz: Well, yeah, I agree. I think it is. There’s certainly been enough troubling examples there. Look, I think you have to continue to do the right thing, but I also come down to the fact that doing the right thing is, is effectuated by having a strong business, having a strong amount of cash in the bank so that if you do have to get into a tangle, either in court or regulatory wise, that could cause some at least short term harm to your business, that you have the ability to stay the course and, and, and, and not, not waver. But yeah, it’s, it’s, it’s a difficult period and it is troubling. But, you know, we just try to make sure we’re continuing to do the right thing that we are, we are reporting with, with fairness and accuracy as job one, but we’re also making sure we have plenty of cash in the bank for any rainy day or any adverse thing, either regulatory wise, legal wise, or just in the general scope of the world. When things come that are adverse, you got to, you got to, just like all of us run our finances, you got to have plenty of cash in the bank for a rainy day.

Tyler Mathisen: Steve, thank you so much. This has been fantastic. Thank you.

Steven Swartz: Thank you very much.

Steven Swartz: Enjoyed it. Thank you. Thank you. Thank you for being here.