Is USA Today’s print edition headed for the sunset as GateHouse and Gannett merge? Signs point to yes.
Is USA Today’s print edition
headed for the sunset as GateHouse and Gannett merge? Signs point to yes.
After a nearly 40-year run, USA Today and its digital sites are
about to undergo a major restructuring that will include building up digital
marketing while phasing out the print edition.
The deal for GateHouse’s parent, New Media Investment Group, to
acquire Gannett, which owns USA Today, will not close for at least another
month. Nothing much will happen — or legally can happen — until then, and don’t
look for this to be the new company’s first order of business. Winding print
down could take several years.
But two knowledgeable sources, talking on background, said a
move away from USA Today in print is part of the calculations for the new
enterprise. It makes a lot of sense, given the print edition’s deteriorating
paid circulation and minimal advertising.
Maribel Perez Wadsworth, USA Today publisher, commented via
email:
“Gannett has no plans to discontinue the print edition of USA
TODAY, which remains an important part of our business.
Gannett remains
committed to high-quality journalism for the communities we serve and our
ongoing digital transformation, and we are pleased to have found a like-minded
partner in New Media. 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.”
Gannett and USA Today leaders have called a staff meeting for
11:30 a.m. Thursday to dispute the findings of this article and answer
questions. (The text of that announcement is at the end of this story.)
Already set in motion are moves to try membership opportunities
and marketing add-ons to boost revenue.
One Gannett editor, speaking on background, told me that new CEO
Paul Bascobert streamed an all-hands meeting to regional papers on the day that
his hiring and the deal agreement were simultaneously announced.
“It ran for an hour and a quarter,” the editor said, “and not
once was there a single mention of print.”
“Digital transformation” has been often promised and rarely
delivered many times over at Gannett — and at other chains. But even
before the merger came together, the same editor said that Gannett had moved to
going all in for digital: “Let’s face reality. We’re (still) going to have to
radically transform.”
Bascobert, while silent publicly, has been highly visible and
proactive in internal meetings with Gannett execs and visits to the largest of
its 109 regional papers.
“He has indicated that he is not impressed with USA Today,” a
source familiar with the meetings told me. “He said ‘middle-of-the-road is not
a strategy.’” (That could apply either to both-sides-of-the-matter reporting
and opinion pieces, or to a mainstream mid-market position.)
On the business side, the 109 regional paper sites, which draw
on USA Today for national content, are beginning to build the number of paid
digital subscriptions. Those stand at 561,000, the company has said in its most
recent earnings report, after a slow start.
And the company claims a monthly unique audience of 127 million
for all of its sites.
This spring at larger circulation regionals, Gannett quietly
dropped a
standalone section of USA Today news at its 35 largest
papers. The effort, code-named Project Butterfly, had
been been highly touted as a reinvestment in print when it
began in 2013.
That move by itself constitutes a significant print cutback,
wiping away distribution of hundreds of thousands of copies. The sections were
simply too expensive, another editor told me, compared to the revenue they
generated.
USA Today’s main site remains free, monetized by high-volume ads
with geo-targeted options.
Declining print circulation numbers paint a picture of why
winding down the five-day-a-week print edition in an orderly way would be
attractive to the merged company.
In its latest audited circulation report earlier this year, USA
Today reported individually paid circulation of 178,000 with another 342,000 of
hotel distribution (for which the hotel chains pay a substantially reduced
rate).
That 520,000 is a long fall from the more than 2,289,000 USA
Today claimed in 2007, when it was running neck-and-neck with the Wall Street
Journal as tops in paid circulation.
Also, if you thumb through increasingly thin editions, it is
clear that most days USA Today in print carries little or no fully paid
advertising.
Figures for the expense side are not available. But think about
the probable cost of printing and distributing all over the country. USA Today
can piggyback on plants at its regional papers in many places. Elsewhere,
however, it needs to contract for printing and delivery.
State-by-state figures, 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 USA Today in print.
Totals range from a low of 266 in Montana to more than 49,000 in California.
A third Ganett editor said, “I’ve been told that the hotel print
distribution still makes money. But if it doesn’t, there is basically nothing
left.”
One argument for staying in print, another editor told me, is
its contribution to branding and supporting the influence of reporting and
editorials on local affairs. While USA Today is no doubt a well-established
brand, the benefit for credibility with a national, rather than local, audience
is less obvious — and may simply be too expensive.
Newspapers in the Advance chain began flipping to
three-day-a-week print delivery seven years ago, getting strong pushback from
readers and local public officials. In New Orleans, Advance’s Times-Picayune
was sold May 1 to its rival,
The Advocate.
As I reported in January, the
rest of the industry did not follow Advance’s lead. Since
then, moving away from print has gathered some momentum. The Pittsburgh
Post-Gazette has
shifted to three days a week in print. A number of McClatchy’s
30 papers are dropping Saturday editions.
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.
Phasing out print would doubtless lead to some downsizing of USA
Today’s news staff of 289 (according to a staff directory), many at the
company’s headquarters in McLean, Virginia, others at bureaus around the
country.
However, the demand for much of the content in digital formats —
mobile especially — will remain. Distributing national stories to the regional
papers would still make sense, and those can be offered to the 260 GateHouse
outlets.
Gannett and its USA Today Network have gradually established a substantial
21-person investigative team, often drawing on both the
reporting resources of the regional papers and a centralized data and editing
team.
That structure won the USA Today Network, collaborating
with The Arizona Republic, a 2018 Pulitzer for explanatory
reporting for a
series of stories and digital visuals on the four-state
Mexican border, titled “The Wall.”
The most recent of these projects focused on domestic
violence in the NFL and the league’s response and abuses
in reverse mortgages, and lobbying
by the Catholic Church and the Boy Scouts against stronger child abuse
laws.
GateHouse, too, has been building a national-to-local
investigative unit with a target of 35 journalists. Look for the two to be put
together.
Gannett editors I spoke with have formed a positive impression
of new CEO Bascobert. He is young (late 40s) with a strong digital and
engineering background. Though not a journalist himself, he indicates
enthusiasm for the company’s journalistic ambitions.
He comes not from within Gannett, as has been tradition, but
from a wedding site, The Knot. There, he was part of a team of executives
pivoting to an unconventional business model that allows engaged couples to
order services directly and charge vendors from all over the country to be
listed.
The New Media-Gannett merger is still not a sure thing.
Shareholder meetings for both companies have been scheduled for Nov. 14. If
approved the company will retain the Gannett name, though New Media will be in
charge.
About half the $1.4 billion purchase price will be in New Media
stock. New Media shares have fallen in value by 24% since the deal was
announced Aug. 1. Nonetheless, Gannett management is recommending approval, in
essence saying the company has no better strategic options.
GateHouse management would not comment on the USA Today changes
or other elements of transition planning. Outside of carefully crafted
Securities and Exchange Commission filings, there is little they are legally
allowed to say while final negotiations are in process.
USA Today, launched in 1982, was the creation of Gannett’s
flamboyant and expansive CEO Al Neuharth. Derided as “McPaper” for its many
abbreviated news nuggets, the paper lost more than $200 million in its first
five years, before eventually turning a profit.
In its early days, USA Today was admired for its full-page color
weather map, a format many other papers adopted, but not much else. Even well
after the paper got more gravitas, for instance with strong stories on airline
safety, the image of “news lite” lingered.
It took the build-out of the investigative unit and stronger
opinion and Washington coverage to earn broader recognition of what USA Today
was doing journalistically.
Neuharth was also the driving force behind the Newseum, which
moved in 2008 from a few floors at Gannett headquarters to prime real estate
and spacious quarters on the Mall in Washington.
Mired in debt, the Newseum will close at the end of this year,
its exhibits to be scattered.
You could say that USA Today in print, the Newseum and Neuharth
himself were extravagant relics of the healthy newspaper industry of the 1980s
and 1990s — but out of step with the digital imperatives and pressed finances
of the present day.
—————-
Staff meeting email:
There was a story on Poynter today that questions the future of
USA TODAY print product. The headline: “Is USA Today’s print edition headed for
the sunset as GateHouse and Gannett merge? Signs point to yes.”
This is not true.
Maribel (Perez Wadsworth, USA Today publisher) made this clear
to the reporter in her statement:
“Gannett
has no plans to discontinue the print edition of USA TODAY, which remains an
important part of our business. Gannett remains committed
to high-quality journalism for the communities we serve and our ongoing digital
transformation, and we are pleased to have found a like-minded partner in New
Media. 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.”
To answer any further questions, we’ll have a staff meeting tomorrow
at 11:30 ET with Paul (Bascobert) and Maribel.
Dial-in instructions to come.
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