Continuing father's legacy, building company's future

Pete Wetmore of News Inc. magazine interviewed Rust Communications co-president and publisher Jon K. Rust for a story about the future of the Cape Girardeau-based company. Following are excerpts from that interview. Rust Communications, owner of the Southeast Missourian, was founded by Gary W. Rust and encompasses more than 50 newspapers in eight states and partial ownership of 17 radio stations. Rex Rust is co-president. Gary Rust is chairman of the board. The interview was conducted during the management transition from the senior Rust to his two sons.

Q: Your father recently retired from day-to-day operations at the newspapers. What will change, what will stay the same at Rust Communications?

J.K. Rust: Our company's commitment to community, local publisher empowerment and employees will stay the same, as will the core values of producing high-quality newspapers that thrive on local news coverage and good advertising value. Changes will be more around process. For example, Rex and I seek to make the center more service-oriented to our publishers, especially with issues like training, technology investment and management-best-practices. Our goal is to have corporate serve each of our individual newspapers. Take the burdens from them where possible, and by doing so, create a system that is poised for more growth. Key to this process is our management team with Wally Lage, chief operating officer, and Dick Caldwell, chief financial officer, here in Cape.

Q: Rust owns papers in other communities, making it a group publisher in its own right. What governs your thinking when you set about to address an issue at a Rust paper that is in a town where you don't live?

J.K. Rust: We believe strongly in local management. There are some things that can be done better and more efficiently from the center -- for example, technology investment and back-office support -- but most of what makes a great newspaper is locally based. And ultimately, our publishers make the tough calls in their own markets. We encourage them to seek perspective and feedback from us, and sometimes we may work a little harder to be more persuasive, but outside of capital expenditures they're empowered to lead their own newspapers. We're blessed to have a COO in Wally Lage who is an e-mail virtuoso. We really depend on e-mail in our management system. Few people besides Rex and I comprehend how talented Wally is. He does an amazing job.

Q: You've been quoted as saying, "Maximizing profit, squeezing the very last possible dollar out of an operation, or out of an advertising sale, is not our goal." What is?

J.K. Rust: Just so that our bankers don't get apoplexy, let me say that we do intend to be a solidly profitable company, and we are. But I look at profit as kind of the oxygen of life. You have to have oxygen to stay alive, but that's not why you live -- just to breathe. Our goal is to create excellence. Excellent newspapers. Excellent managers. An excellent work environment. Most importantly: excellent communities in which to work and play. Do we know exactly how to get there? No. Do we have full control of making such things happen? Of course not. But we'll never stop trying to get there. That's the kind of people who work here; people who constantly want to get better, who set a high bar for themselves, who want to impact the world for good and enjoy life at the same time.

Q: How might Rust grow differently in the next few years than in the last few?

J.K. Rust: We're quite happy with how we've grown the past few years. It's a real credit to my dad, Wally Lage and all our publishers that we've been able to grow like we have: from four newspapers in 1992 to more than 50 today, mainly in strategic clusters. Our biggest change is that in the past we've had the luxury of being able to throw people at the new acquisitions. Various department heads throughout our company have been able to travel to the new acquisitions and do lots of one-on-one counseling. The bigger we get and the faster we grow, we simply can't spread our people that thin, however, so we are developing better instruments. For example, we're building an Internet-based "publisher's toolbox" to bring both current and new publishers up-to-speed with issues ranging from the implementation of a digital darkroom to our independent contractor forms. As we seek to do everywhere else, we seek to create an excellent process for integrating the new acquisitions into our company, and in spreading the positive aspects of our culture. This will be a work-in-progress for a long time.

Q: Taking a snapshot only today, what's the future of family newspapering going to hold?

J.K. Rust: You mentioned estate taxes. That is certainly taking a hit on the family newspaper business. Then there's the uncertainty about new technology, especially the Internet. Combine those concerns with the historic multiples that newspapers are selling at, and it's understandable why so many families are cashing out. There's another influence in there, too, and that is that newspapering simply doesn't have the glamour it once did. So many kids today are growing up watching TV and using the Internet that they get caught up in the glitz, leaving only dispassionate finance gurus to see the value of owning newspapers. Or, newspaper kids see only the hardships and grind of newspaper life, and why in the world would they want to enter that? In our family, we celebrate the business and our employees. We have fun. If we didn't, my brother and I wouldn't be in the business.

On a more specific level, though, I do believe that we are seeing the end of families owning single newspapers in small markets, unless they affiliate themselves with a geographic network of papers. The main reason is the retail advertising environment. As regional box stores with national brands expand their retail dollar domination, they will drive out the locally-decided ad spending and employ ad vehicles like direct mail, which are less effective, but easier for the national ad agencies to place. The only way for the small-market family newspaper to survive then will be to create exceptional local content and join in a broader advertising network. Learning how to target advertising in a print plus Internet package will also be an important capability to develop.