'USA Today' to Cost 75 Cents; Gannett Execs Upbeat

By: E&P Staff Executives at Gannett Co. Inc. announced today that USA Today would hike its single copy price to 75 cents from 50 cents on Sept. 7.

It's the newspaper's first price increase in 19 years.

"This price increase plan will call for the momentum in other circulation distribution methods to make up any single-copy losses," Publisher Craig Moon revealed in a memo to staff. "We expect to continue to grow our overall circulation volume." He said the company had hired McCann-Erickson and was already testing three new media campaigns.

"The decision to increase the cover price in September was made to correspond when demand for USA Today is at its highest," Moon explained. "For single copy, this occurs during football season. This year the presidential election will create additional demand for the newspaper."

Moon told E&P that executives had been thinking about a price increase for the past year and that they felt confident that they could do so without experiencing a drop in circulation. "It's a way for us to provide better margins to our shareholders," he said, "and a way to build the brand."

The price increase emerged from the company's presentation at the industry's Mid-Year Media Review for analysts today in New York. Overall, the executives painted a rosy picture for the second half of 2004, but could only give the overall newspaper economy a mixed forecast. They expect the economy to grow, but fear the recovery will be uneven.

Douglas H. McCorkindale, chairman, president and CEO of Gannett, praised the company's "solid results" year-to-date for all of its operating divisions. Gary Watson, president of the Newspaper Division, said the strategy to grow revenues from online and non-daily publications is working well. Craig Dubow, president and CEO of Gannett Broadcasting, said he is "encouraged heading into the second half of 2004."

Craig Moon, president and publisher of USA Today (Click for QuikCap), which was beset by the Jack Kelley ethics scandal this spring (resulting in a new editorial team), noted a 4% circulation gain this year.

Gracia Martore, senior vice president and chief financial officer, said the company anticipates it will achieve earnings per share for the second quarter in the $1.28 to $1.30 range, consistent with many of the current expectations.