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NEW YORK — Frank Bennack Jr. had some advice for Steve Swartz. It was 2000 and Swartz was the editor in chief of Smart Money magazine, which he founded eight years earlier after a career that had been on fast-forward at The Wall Street Journal. Swartz had joined that paper in 1984 and by the end of the decade was the page one editor, a young wunderkind among heavyweights like Norman Pearlstine and Paul Steiger. At Smart Money, he shook up the dinosaurs of the category, like Money and Kiplinger’s. Now, Bennack told him, it was time to do something else.
“He said there are different paths to success. Some people want to keep creating product,” like making new magazines, Swartz recalled in an interview from Hearst Tower. Others built businesses.
This story first appeared in the April 1, 2013 issue of WWD. Subscribe Today.
“It was really Frank who offered me a chance to work in corporate management,” Swartz said.
He jumped onto the management track in 2001, taking the title of executive vice president, Hearst Newspapers, the company’s bedrock, and has rapidly risen through the corporate ranks since, ending up chief operating officer in 2011, then president last December. Last week, he succeeded Bennack as only the seventh chief executive officer in Hearst’s 126-year history. Bennack will remain vice chairman of the board and chairman of the executive committee.
In one leap, Swartz, 51, became a rarity in today’s media landscape: an editorial guy who will become ceo of a multibillion-dollar conglomerate that spans newspapers, magazines, television and real estate.
“If the list is more than Steve, it’s probably very short,” James B. Stewart, a friend who’s now a columnist at The New York Times, said of the naming of a former editor as a ceo. Stewart sat across a partition from Swartz at the Journal in the Eighties and they reported alongside each other on the 1987 stock market crash and financial scandals of the late Eighties.
“I remember calling around executives who were part of my beat. None of them knew what was happening,” Swartz recalled.
Stewart, who went on to win a Pulitzer Prize for his work, credits Swartz with preternatural editorial gifts; the title of his book, “Den of Thieves,” was partially suggested by his younger colleague.
“I would shamelessly take advantage of him. He’s a natural editor. He had a great news sense,” Stewart said. When Stewart became page one editor, Swartz was one of his first hires. To this day, Stewart said, he “gives him every book manuscript I finish. I still think he’s a great editor.”
Swartz’s career was on the fast track — he became page one editor himself in 1989 and, in 1992, Pearlstine tasked the then 33-year-old with starting a new personal-finance magazine, Smart Money, co-owned by Dow Jones and Hearst. Stewart, Ron Suskind and Jim Cramer, then an unknown, wrote early attention-grabbing pieces that upended that magazine category, which was then at the bottom of the Wall Street food chain.
“There was a whole contrarian attitude from Day One,” Stewart recalled of the magazine.
The ceo-designate Swartz, not one to miss a chance for a corporate plug, compared Smart Money’s legacy to the more recent launches of Hearst titles like Food Network Magazine and HGTV Magazine. “We redefined a category,” he said.
When Smart Money launched, the separation of church and state between editorial and business in the magazine world was beginning to blur, and Swartz jumped on the bandwagon. One of Smart Money’s early innovations was creating custom content for companies, like literature on a client’s 401(k) plans.
“He was in the content business way ahead of the curve,” said Michael Clinton, who joined the company in 1997 and is now Hearst Magazines’ president, marketing and publishing director.
By the time Swartz joined the newspaper division in 2001, Bennack had radically diversified the company he took over in 1979. Hearst had expanded into broadcasting and syndication —it has significant stakes with the Walt Disney Co., ESPN and the A&E Networks, which include the History Channel (Swartz claims to be a fan of the series “The Bible”).
Bennack hasn’t ignored the print side, either, drastically expanding the company’s magazine operations and their international reach with the 2011 acquisition of Hachette Filipacchi’s titles for $900 million in cash.
“We run our company as if it was public. There’s a keen appreciation for generating greater profits,” said Clinton. “When you do that, then you invest and buy and build. That’s Frank’s big legacy.”
While running 15 daily newspapers, Swartz assimilated the corporate mentality. One of his signature moves was to offer marketing services, through the program LocalEdge, to small businesses that did not have digital advertising savvy. And while he may have started on the editorial side, he’s now management, and isn’t shy about making unsentimental decisions, such as turning the Seattle Post-Intelligencer into an all-digital operation.
“It was obviously a tough decision,” Swartz said. The P-I’s evolution was closely watched by the industry as a possible model, but Swartz begged against that notion, describing it as a unique situation.
“We remain committed to seven-day publishing,” he said of Hearst’s papers. “Newspapers are still a tough business. I don’t want to claim we have all the answers. We’ve tried some things that are showing signs of success, and we’re pleased with our results.”
In 2008, Victor Ganzi, who had been designated as Bennack’s successor in 2001 when he was named president and ceo, was ousted over disagreements with the Hearst family. Swartz’s star continued to rise as he stuck to the Bennack playbook. He was named president of the newspaper division in 2009 and two years later became the group’s chief operating officer. In December, Bennack handed over his title of president, a token of his appreciation, even as he continued to run things.
On the surface, Swartz is Bennack’s polar opposite — a card-carrying member of the East Coast intellectual elite who graduated from Harvard to make a name for himself at the Journal. But after two decades at Hearst, Swartz has adopted a corporate mind-set that owes as much to the namesake William Randolph Hearst (himself a tried-and-true newspaperman) as it does to Bennack. It ensures that, even if he holds the title of ceo, his mentor will continue to cast a long shadow over the tower.
“When you have a professional like Frank at the head of the class, it’s a very good class,” said Hearst Magazines editorial director Ellen Levine.
While Bennack, 80, isn’t going anywhere, some things will change — Hearst Magazines president David Carey, for instance, will now report to Swartz, not Bennack. But there will be lots of continuity, a point that editors and Swartz himself underlined. Still, a former editor as ceo is an encouraging sign, said Esquire editor in chief David Granger. They could have instead gotten a consumer marketer, or, heaven forbid, a digital media whiz, like at Time Inc.
“It gives us all hope,” Granger said. “There’s a sensitivity in him for the effort that goes into creativity.”
Also encouraging is his kinship with Bennack, said Harper’s Bazaar editor Glenda Bailey.
“The greatest compliment I can pay him is that he has the same characteristics as Frank,” she said.
Swartz, in keeping with Hearst tradition, doesn’t speak often to media, and when he does, is a diplomatic interview, likely to deflect praise and lavish praise on others, one man in particular. In a quick interview, he did not address if Hearst intended to invest more money in digital ventures or would pursue other acquisitions, in print or broadcasting. Asked how he intends to step out of Bennack’s shadow, he demurred.
“First of all, Frank is our executive vice chairman. He’s still going to be here on a daily basis,” he said. “My job is to just work with Frank and our division heads and our board to keep following the path that Frank has laid down for us.”