Hearst rang in the New Year with a look back at 2015.
Company president and chief executive officer Steve Swartz circulated a memo to staff Monday morning addressing wins and losses of the year.
He led with the good news, which included touting Hearst’s fifth consecutive year of “record levels” of revenue growth and profit. While Hearst is a privately owned company, and thus does not disclose figures, the ceo said revenue grew 6 percent to $10.7 billion in 2015.
Hearst credited its revenue growth to investments, such as Fitch Group, its single largest majority-owned business at 80 percent; First Databank, a drug information company that is its largest “wholly owned stand-alone business,” and Homecare Homebase, a software services company for the home-health industry.
Swartz turned to the media branch of the company, noting that Hearst Newspapers was profitable for the fourth straight year, and its U.S. magazines division pulled a profit for the second year in a row.
Hearst’s cable television companies, ESPN and A+E Networks, also delivered profitable growth, but the ceo acknowledged the difficult environment for the group. In October, ESPN slashed about 300 jobs, or 4 percent of its workforce, in order to invest in digital amid flagging cable and satellite subscriptions.
Swartz addressed the cuts, offering: “Sports rights have gotten more expensive and cord-cutting and cord-shaving have caused modest losses in the number of ESPN households; however, we are confident that this brand and this team have many years of strong revenue and profit growth ahead of them, as there simply is no substitute for ESPN.”
Hearst’s broadcast TV group achieved “record revenue,” the company said, but there was no mention of profit growth. The company said that television “in all forms remains by far Hearst’s biggest business,” adding that it’s eyeing emerging streams of revenue for TV, included targeted advertising and new forms of TV content bundles.
Despite all the crowing about a record-breaking year, the ceo did admit that “cutting through the clutter” in consumer media is the company’s “preeminent challenge.” Hearst hopes to slash through the thicket with live sports events via ESPN, by using Cosmopolitan’s “unique voice” for young women and Sweet, its new Snapchat channel led by Cosmo’s editor in chief Joanna Coles. The company is also looking to local news franchises, WCVB-TV in Boston and the Houston Chronicle, as well as investments in digital brands Buzzfeed, Vice, AwesomenessTV, Complex and Roku.
Swartz noted the difficult international environment, offering: “Our overseas magazines, headed up by Duncan Edwards, continued to battle against sluggish markets, the strong dollar and some difficult political situations.”
Nonetheless, Hearst said it would continue to invest in core operations. The company noted that it spent about $150 million in 2015 on projects such as the development of digital publishing platform MediaOS for all of its consumer media mobile and Web properties, as well as a new headquarters for the Houston Chronicle and KETV, its Omaha, Neb., TV station.
On the flip side, Hearst ended its four-year partnership with reality TV producer Mark Burnett by agreeing to sell its remaining stake in United Artists Media Group to MGM.
The ceo ended his note name-checking leaders across the company, including the magazine division’s digital executives, President Troy Young and content chief Kate Lewis, and business-side gurus Michael Clinton and Todd Haskell. Although he mentioned a handful of magazines for their strong year, he singled out Harper’s Bazaar as setting a “profit record” in 2015.