Carl Sandburg had not hit his poetic stride, and Upton Sinclair had yet to unearth the rot from the South Side meatpacking houses, but adventurous print tycoons with a taste for scandal, intrigue and human frailties already knew that Chicago contained a mother lode of profit for an enterprising newspaper.
That was 1898, the same year that Hosea Christian Paddock bought the Palatine Enterprise, on prairie land far from the journalistic wars that had been waged by Joseph Medill and Long John Wentworth and would soon be furthered by William Randolph Hearst and Col. Robert McCormick.
But not too far, as it turned out.
Little did Paddock know that the war would work its way to the doorstep of his grandson, Stuart R. Paddock Jr., the Sam Walton of suburban journalism and arguably the colonel of Arlington Heights, where Paddock Publications Inc. is based.
It is in the land of freeways and sprawling developments that the 79-year old Paddock has built a small collection of bake-sale-, town-council- and PTA-driven weeklies into the Daily Herald, the third-largest newspaper in Illinois, serving portions of Cook, DuPage, Kane, Lake and McHenry Counties. Through expansion into growing suburban communities, Paddock has taken the daily circulation to 124,595.
“Fear God, tell the truth and make money,” reads the motto under the Herald’s masthead.
It is the third tenet of that motto that instinctively draws competing newspaper owners to this family-run operation. They covet the reach of the Herald’s 20 editions to an enormously attractive upscale readership. The newspaper wars in most big cities have largely been reduced to mere conflicts. In the newspaper industry, a modified version of bank robber Willie Sutton’s credo has taken over: The suburbs are where the money is.
That is why many newspapers, including the Chicago Tribune, are moving aggressively into suburban areas, either buying papers or creating individual suburban news and advertising sections for their papers. And that is one reason why Stu Paddock’s phone rings.
“I don’t know who they represent, I don’t even want to talk to them and I won’t take their calls,” Paddock said of the newspaper brokers who call inquiring about the availability of the Herald. It’s not for sale.
Yet sitting atop the end table in Paddock’s office is the autobiography of Conrad Black, the swashbuckling Canadian newspaper baron who bought the Chicago Sun-Times and the suburban Pioneer Press and Star newspapers last year. Black followed that up in December by gobbling up the Daily Southtown, thereby forming the clear beginnings of a newspaper circle around Chicago.
Read nothing into that, Paddock says. No sale.
“No. Not at all. Never,” said Paddock in an interview in his Rolling Meadows office, which-appropriately-overlooks the freeway.
“At our ages, what would we do with a lot of money? Take the joy out of our life? Our promise to our father and grandfather?” he asks. “It’s like part of our family.”
The family is a triumvirate of Paddocks controlling the voting stock, led by Chairman and Publisher Stu Paddock, who says he holds 51 percent. His brother, Robert Y. Paddock, 77, is the vice chairman, while his sister, Margie Flanders, 81, is vice president and secretary. There is an employee stock ownership plan, but workers’ voting power is limited to 10 percent, according to Herald President Daniel E. Baumann.
Paddock Publications is a reflection of suburban growth and affluence, and provides the silver lining to the often-gloomy array of newspaper statistics. Much is made of the well-documented decline in the number of cities with two or more newspapers. Lost in that, however, are figures showing the redistribution of newspapers in search of readers.
The number of morning newspapers has almost doubled since 1946, according to the Newspaper Association of America, while the number of Sunday papers has increased 79 percent. In the age of TV, the total number of morning and evening newspapers has dropped by about 12 percent in the last half century, largely due to the shift from afternoon publication.
The Herald was among the sleepy group of weeklies awakened by the great American move to the suburbs. Asleep, that is, until aroused by competition from downtown Chicago.
“In the late 1960s, community newspapers were under considerable stress, and the Sun-Times decided to publish the Day newspapers. They moved into Arlington Heights and almost succeeded in driving the Paddock family out,” said Carl M. Larson, who at the time was a professor of marketing at University of Illinois at Chicago. He now serves on the company’s board of directors.
The Tribune made its first foray into the suburbs in the late 1960s, eventually expanding its Suburban Trib tabloid inserts to 11 zones before shutting them down in the early 1980s. The Tribune renewed its suburban push in the mid-1980s with zoned sections of the broadsheet paper.
In response to the new suburban competition, Larson wrote a marketing study for Stu Paddock recommending, among other things, that he switch to daily morning publication. “That was the beginning of progress at the Daily Herald,” Larson said.
Methodically, Paddock expanded the reach of the Herald, starting daily publication in Arlington Heights, Mt. Prospect, Rolling Meadows and Palatine. Expansion continued into other communities, and in 1970 Paddock bought Day Publications.
He plowed profits back into more expansion, including a high-speed printing plant in 1986.
In 1974, Herald circulation was 11,800. By 1984, through further expansion, it had risen to 62,700. By 1994 it had nearly doubled that figure.
Mark Sweetwood, managing editor of a Paddock competitor, the Northwest Herald in Crystal Lake, watches the Herald’s maneuvering with some bemusement. “We view them the same way they view the Tribune,” he said.
One key to much of Paddock’s activity is the independence of the family, unfettered by outside investors. “You don’t have to answer to any stockholders other than yourself. That’s what makes it fun,” Stu Paddock said.
“We don’t believe that you have to make a lot of money,” he said. “I think we would have expired long ago if we had to try to maintain a 20 percent profit margin,” a level Paddock says the paper does not come close to achieving.
Paddock said he has no plans to retire. Although Robert Paddock Jr. and Stuart Paddock III-both company employees-are in line to run the company, the elder Paddock is not disclosing his intentions. A succession plan has been worked out so that “the company will be run by professional people and that it be owned by Paddocks,” Baumann said.
“Whenever you have a family-held paper, it becomes difficult as the family expands,” said Larson. “Nobody can foresee what will happen, but at this stage I don’t see any attempt to not keep the family in the business.”
During the tight-money days of the early 1970s, the Paddocks started sale negotiations with Virginia-based Media General. The expected intensified competition in the suburbs will probably increase the value of the Herald in a market that already favors the sellers.
“There’s all the right ZIP codes and none of the downtown problems,” said Gerald Reilly, a media broker in Greenwich, Conn.
This represents both pressure and opportunity for the Paddock heirs.
“It’s going to get tougher for suburban papers with competition from the big-city papers,” said newspaper analyst Tod Jacobs of Sanford C. Bernstein & Co. in New York.
Jacobs said suburban papers were lucky that most major dailies failed to move aggressively into suburban turf in the early 1980s. “It allowed them (suburban papers) to establish a beachhead. But I suppose you could now say the Marines are coming.”
