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How Does USA Today Survive?

Discussion in 'Journalism topics only' started by LanceyHoward, Feb 7, 2015.

  1. LanceyHoward

    LanceyHoward Active Member

    USA Today has got to be very expensive to print and distribute. It has only a few ads and I don't know anyone who has ever actually paid for a copy. The original niche that the newspaper tried to hit, which was to provide national news that could not be accessed in the local media, has been obliterated by the Internet. How can Gannett keep that boat afloat when they are slashing staff in local markets?
     
  2. HejiraHenry

    HejiraHenry Well-Known Member

    You can forsee a moment when it's just a digital site and those supplemental pages in Gannett papers - and others, I read where Richmond has bought in.
     
  3. LanceyHoward

    LanceyHoward Active Member

    One thing I find very disturbing, as someone who likes newspapers. is that Gannett does not appear to have any interest in buying local print. Given the ;low multiples of operating profit that that newspapers are currently selling for I would think Gannett would try to buy papers in the same area as the ones they already own and try to achieve economies through the cluster. I think the fact that they have no apparent interest in this strategy says frightening things about the economic state of the newspaper industry.
     
  4. Doc Holliday

    Doc Holliday Well-Known Member

    Thanks for joining us. Where have you been the last 10 years?
     
  5. HejiraHenry

    HejiraHenry Well-Known Member

    I think you have it ass-backwards. My sense is that, after the stock split, the dead-tree Gannett entity, whatever it's called at that point, will start divesting itself of selected properties as a real estate play. It'll keep the promising digital markets and burn down the rest.
     
  6. Riptide

    Riptide Well-Known Member

    On the way out the door, Gannett will blame its readers for drying up the markets.
     
  7. Baron Scicluna

    Baron Scicluna Well-Known Member

    Only the white males.
     
  8. LanceyHoward

    LanceyHoward Active Member

    I am well aware that the last 10 years have been a disaster. But newspapers are selling for 4-5 times cash flow. If Gannett was to buy. as a hypothetical Lexington, they could combine websites and print in Louisville. They could sell the real estate in Lexington and recoup some of their investment. By combing publishing incremental capex would be close to nil. If you could reasonably expect cash flow to stay anywhere close to what it is now it would be a great deal.

    The fact that Gannett is not doing that indicates that they think that revenues are going to continue to plummet. Tribune, on the other had, is trying to cluster, as evidenced by a couple of recent purchases they have made.
     
  9. JayFarrar

    JayFarrar Well-Known Member

    I don't think anyone expects cash flow to stay at the sam levels plus gannett is publicly traded.

    If they went and bought new papers you take on additional costs, like pension liabilities, and you get hammered by your investors for growth when, they think, you should be cutting.

    Plus USAT is already a digital platform. The print edition is a marketing tool that pushes the website. Plus, as noted elsewhere, something like 70 percent of staff generated copy doesn't make the print edition.
     
  10. Doc Holliday

    Doc Holliday Well-Known Member

    Huh? I don't have anything ass-backwards. None of these are my ideas, chump.
     
  11. wheels89

    wheels89 Member

    With the slashing of staffs, copy editing at the design hubs and everything else, I could see the local editions becoming a supplement inside USA Today instead of the other way around.
     
  12. franticscribe

    franticscribe Well-Known Member

    It's been a while since I really dug into Gannett's finances, so I'm not sure what the current situation is. But as recently as five years ago, USA Today's biggest revenue source was all the hotels that paid for copies to provide their customers. Most hotel chains have stopped doing that. The paper has always struggled to make ends meet and for much of its history it was subsidized by the local Gannett papers.

    For awhile Gannett appeared to be moving toward a model where the local papers were essentially going to be a wrap for USAT product. Not sure if that's still the direction or not, since in the meantime they've split the company and divested several of the local papers. And I no longer live in a Gannett market and rarely pick up a USAT.
     
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