USA Today may begin ‘phasing out’ its print edition: Report
Commentator John Burnett, radio host Carol Roth, investment adviser Gary Kaltbaum and FOX Business’ Kristina Partsinevelos and David Asman cover the pros and cons of newspapers going digital.
A staple of American life — especially for hotel guests — for nearly the past 40 years could be fading away as a major restructuring of USA Today could see a phasing out of the national newspaper's print edition.
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USA Today’s parent company, Gannett, is set be acquired by New Media Investment Group for $1.4 billion. New Media Investment Group already owns GateHouse Media and its 154 daily newspapers is planning a major restructuring that will include building up digital marketing while phasing out the print edition according to the media web site, Poynter.
The merger will not close for at least another month, but already staff concerns are making their way into digital publications. One source told Poynter that new Gannett CEO Paul Bascobert "has indicated that he is not impressed with USA Today,”
USA Today cites data from the Alliance for Audited Media in its media kit that claims "an average daily paid circulation Monday–Friday of 726,906." Poyntner reports paid circulation of 178,000, plus another 342,000 of hotel distribution, for which the hotel chains pay a substantially reduced rate.
Still, either the USA Today figures or Poynter's 520,000 combined circulations (paid + hotel) is a massive plunge from the 2,289,000 that USA Today claimed in 2007 – when it competed with the Wall Street Journal for the lead in paid circulation.
Despite employee leaks and declining sales figures USA Today publisher Maribel Perez Wadsworth, responded to Poynter with an email denying any type of demise for USA Today. “Gannett has no plans to discontinue the print edition of USA Today, which remains an important part of our business."
As for the impact of the impending merger, Wadsworth added, "We believe the combination of our two companies will transform the landscape in the print and digital news business and, following the close of the transaction, we look forward to delivering on the compelling benefits for audiences, customers, employees and shareholders.”
Bascobert, the new CEO, seemed to contradict his publisher's email in a weekly memo sent to Gannett executives: "Our USA TODAY and local print products continue to be great businesses for us with loyal customer bases. However, we do need to respond to consumer’s preferences, which are shifting to consuming news online and mobile. To be clear, the decision will be made by the market telling us where we should focus." The email was obtained by Poynter on Thursday, one day after it published its original story.
The 109 regional paper sites, which draw on USA Today for national content, are starting to build the number of paid digital subscriptions, which are currently at 561,000, the company said in its most recent earnings report. It also reports a monthly unique audience of 127 million for all of its sites.
However, after four years of offering 35 of its largest local papers a USA Today branded section on national and international news, Gannett discontinued the section after touting its potential to grow the USA Today and local news business model.
That move represents a significant cutback to print, wiping out the distribution of hundreds of thousands of copies. An editor told Poynter that the sections were simply too expensive relative to the revenue they generated.
“Gannett has no plans to discontinue the print edition of USA Today, which remains an important part of our business.”
USA Today’s main website remains free, monetized by high-volume ads with geo-targeted options.
David Chavern, President & CEO, News Media Alliance had no comment except to say that it's "not clear to me what is going to happen to the USA Today print edition." Gannett is a member of the Alliance and its publisher Wadsworth serves on the board.
State-by-state figures for USA Today — part of the circulation report to the Alliance for Audited Media for the second quarter — show that the paper does indeed deliver on its promise to be available all over the country. In all 50 states, readers can get a copy of the paper in print. Sales range from a low of 266 in Montana to more than 49,000 in California.
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GateHouse and Gannett executives have promised $275 million to $300 million in cost-saving “synergies” as a rationale for the merger. Eliminating, or even just scaling back USA Today in print, would add up to a healthy downpayment on that goal.
The New Media-Gannett merger still must be approved by shareholders. Both companies have scheduled meetings for Nov. 14. If approved the new company will retain the Gannett name, though New Media will be in charge.
About half of the $1.4 billion purchase price will be in New Media stock, and its shares have fallen in value by 24% since the deal was announced Aug. 1. Gannett management is recommending approval, in essence saying the company has no better strategic options.
USA Today was launched in 1982, the creation of Gannett’s renowned CEO Al Neuharth. With its colorful look, which was unique at the time, the paper was derisively called “McPaper” for its many abbreviated news nuggets. USA Today lost more than $200 million in its first five years before turning a profit. It took an expansion of the investigative unit and stronger opinion and Washington coverage to earn broader recognition of what USA Today was doing journalistically.
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