GRAVETTE — The parent company of The Benton County Daily Record and the parent company of The Morning News of Northwest Arkansas announced last Thursday a proposal to create a joint venture between the firms in northwest Arkansas.

The companies - the Arkansas Democrat-Gazette, which is owned by Wehco Media, and Stephens Media LLC - requested that the U.S. Department of Justice review the proposal.

The Arkansas Democrat-Gazette publishes The Benton County Daily Record in Bentonville, the Northwest Arkansas Times in Fayetteville, a zoned edition of the Arkansas Democrat-Gazette in Benton and Washing Counties and various weeklies, including The Gravette News Herald.

Stephens Media publishes The Morning News in Rogers and Springdale and various weekly publications in Benton and Washington Counties in Arkansas and McDonald County, MO.

According to a press release issued last Thursday, the newspapers have suffered significant financial losses during the current economic recession. Both companies have employed various cost-cutting strategies but, despite these measures, the newspapers continue to have significant operating losses.

Under the proposed joint venture, a new Arkansas limited liability company will be formed, which will be equally owned by the parties.

At the request of the Department of Justice, Stephens Media has agreed to pursue the sale of The Morning News to a qualified buyer who would agree to continue publishing The Morning News separately as a daily newspaper in competition with the Arkansas Democrat-Gazette and other media.

According to an article in the Arkansas Democrat-Gazette Walter Hussman, Jr., president and chief executive officer of Wehco Media, Inc., was quoted as saying he "didn't know how much time the Justice Department would allow for a potential buy for The Morning News to step up." He added, "If someone comes along and buys it then we'll compete and this merger won't be consummated. We suspect that this won't happen."

News, Pages 7 on 09/09/2009