Is the print edition of usa today heading for the sunset when gatehouse and gannett merge? The 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 a digital marketing operation while discontinuing print editions.

The deal for GateHouse's parent company, New Media Investment Group, to acquire Gannett, which owns USA Today, won't close for at least another month. Until then, not much will happen – or legally can't happen – and don't see this as the new company's first agenda. Rewinding the pressure can take several years.

But two knowledgeable sources who spoke on background said a move away from the printed USA Today was part of the calculations for the new venture. Given the declining paid circulation of the print edition and low advertising, this makes a lot of sense.

Maribel Perez Wadsworth, editor of USA Today, 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 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 change the landscape in the print and digital news business, and we look forward to delivering the compelling benefits to audiences, customers, employees and shareholders once the transaction is complete."

Gannett and USA Today officials have called a staff meeting for Thursday at 11:30 a.m. to discuss the findings of this article and answer questions. (The text of that announcement is at the end of this story.)

Steps are already underway to try membership opportunities and marketing add-ons to increase revenue.

A Gannett editor who spoke on background told me that new CEO Paul Bascobert had streamed a meeting of all parties to regional newspapers on the day his hiring and the deal agreement were announced at the same time.

"It ran for an hour and a half," the editor said, "and not once was print mentioned."

"Digital transformation" was often promised at Gannett – and at other chains – and rarely implemented. But even before the merger happened, the same editor said Gannett had moved to go all digital: "Let's look at reality. We will (still) have to change radically."

Although Bascobert has been publicly silent, he has been highly visible and proactive in internal meetings with Gannett executives and visits to the largest of its 109 regional newspapers.

"He has indicated 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'." (This could apply either to reports and opinion pieces on both sides of the issue or to a mainstream position in the mid-market.)

On the business side, the 109 regional newspaper sites that rely on USA Today for national content are starting to build up the number of paid digital subscriptions. After a slow start, these amount to 561.000, according to the company's latest earnings report.

And the company claims a monthly unique audience of 127 million for all its websites.

This spring, Gannett quietly dropped a standalone USA Today news section at its 35 largest newspapers at larger circulations regionally. The effort, code-named Project Butterfly, was highly touted as a reinvestment in printing when it began in 2013.

This step in itself represents a significant reduction in print, wiping away the 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 website will remain free and will be monetized through high-volume ads with geographically targeted options.

Declining print circulation numbers illustrate why an orderly wind-down of the five-day-a-week print edition would be attractive to the merged company.

In its last audited circulation report earlier this year, USA Today reported an individual paid circulation of 178.000 with another 342.000 in hotel sales (for which hotel chains pay a significantly reduced rate).

That 520.000 are a long way down from the more than 2.289.000 that USA Today claimed in 2007, when it was tied with the Wall Street Journal as the leader in paid circulation.

Also, as you flip through the thinning editions, it becomes clear that USA Today in print has little or no fully paid advertising on most days.

Figures on the expense side are not available. But consider the likely cost of printing and distributing it across the country. USA Today can piggyback on plants at its regional newspapers in many places. Elsewhere, however, it must conclude a contract for printing and delivery.

State figures that are part of the circulation report to the Alliance for Audited Media for the second quarter show that the newspaper is indeed delivering on its promise to be available statewide.

Readers in all 50 states can receive a print edition of USA Today. The total ranges from a low of 266 in Montana to more than 49.000 in California.

A third Gannett editor said, "I'm told that hotel print distribution still makes money. But if not, there is essentially nothing left."

One argument for staying in print, another editor told me, is its contribution to branding and supporting the impact of reports and editorials on local issues. While USA Today is undoubtedly a well-established brand, the benefit to credibility with a national rather than local audience is less obvious – and may simply be too expensive.

The Advance chain newspapers began switching to three-day-a-week print delivery seven years ago, meeting strong opposition from readers and local officials. In New Orleans, Times-Picayune was acquired by Advance on 1. May sold to his rival The Advocate.

As I reported in January, The rest of the industry did not follow Advance's lead. Since then, the move away from print has picked up some steam. The Pittsburgh Post-Gazette has shifted in print to three days a week . A number of McClatchy's 30 newspapers are discontinuing their Saturday editions.

GateHouse and Gannett executives have promised $275 million to $300 million in cost-saving "synergies" as justification for the merger. Eliminating or even reducing USA Today in print would lead to a healthy down payment on that goal.

The phasing out of print would undoubtedly result in some staff reductions at USA Today news of 289 (according to the staff directory), many at the company's headquarters in McLean, Virginia, others in bureaus across the country.

But demand for much of its content in digital formats – especially mobile formats – will persist. Distribution of national articles to regional newspapers would still make sense, and they can be offered to GateHouse's 260 outlets.

Gannett and its USA Today network have gradually a comprehensive 21-person investigative team , often drawing on both the reporting resources of regional newspapers and a centralized data and editorial team.

This structure won the USA Today Network, in collaboration with The Arizona Republic, a 2018 Pulitzer for explanatory reporting a series of stories and digital visuals on the Mexican four-state border called "The Wall".

GateHouse has also built a national-to-local investigative unit with a target of 35 journalists. Look for the two to be combined.

Gannett editors I've spoken with have had a positive impression of the new CEO Bascobert. He is 55 years old and has a strong digital and technology background. Although not a journalist himself, he expresses enthusiasm for the company's journalistic ambitions.

It comes not, as is traditional, from Gannett, but from a wedding site, The Knot. There, he was part of a team of executives who turned to an unconventional business model that allows engaged couples to order services directly and hire vendors from around the country to be listed.

The merger of New Media and Gannett is not yet certain. Shareholder meetings for both companies are scheduled for 14. November planned. If approved, the company will keep the Gannett name, although New Media will be responsible.

About half of the $1.4 billion purchase price will be in New Media stock. New Media's shares have risen since the transaction was announced on 1. August down 24% in value. Still, Gannett management recommends approval because the company essentially has no better strategic options.

GateHouse management would not comment on USA Today's changes or other elements of the transition plan. Aside from carefully crafted filings with the Securities and Exchange Commission, there is little they are legally allowed to say while final negotiations are underway.

USA Today was launched in 1982 and 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 finally turning a profit.

In its early days, USA Today was admired for its full-page color weather map, a format that many other newspapers adopted, but not much more. Even long after the newspaper gained prominence, with strong articles on aviation safety, for example, the "News Lite" image persisted.

It took the expansion of the investigative unit and stronger opinion and reporting in Washington to gain broader recognition of what USA Today did journalistically.

Neuharth was also the driving force behind the Newseum, which in 2008 moved from a building across the street from the former Gannett headquarters to prime real estate and spacious quarters on Pennsylvania Avenue, a block from the National Mall in Washington, D.C., moved.

The debt-ridden Newseum will close at the end of this year, its exhibits dispersed.

You could say that USA Today in print, the Newseum and Neuharth itself were extravagant relics of the healthy newspaper industry of the 1980s and 1990s – but not in tune with the digital imperatives and strained finances of the present day.

Staff meeting email:

There was a story about Poynter today that calls into question the future of the USA TODAY print product. The headline, "Is USA Today's print edition heading toward the sunset as GateHouse and Gannett merge?? The signs point to yes.'

That is not true.

Maribel (Perez Wadsworth, USA Today editor) 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 quality journalism for the communities we serve and to 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 change the landscape in the print and digital news business, and we look forward to delivering the compelling benefits to audiences, customers, employees and shareholders once the transaction is complete."

To answer more questions, we have a staff meeting tomorrow at 11:30 ET with Paul (Bascobert) and Maribel.

Correction: this story has been updated to correct the age of Paul Bascobert and the original location of the Newseum, which is across the street from Gannett and USA Today's former headquarters, not in the same building. It is currently located on Pennsylvania Avenue, one block from the National Mall in Washington, D.C. removed. We regret the mistakes.

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