USA Today is unveiling its most extensive redesign since its launch 30 years ago, effective with today’s paper.
The paper that revolutionized newspapers three decades ago with splashy color photos and info graphics is going to increase color, photos and info graphics even more with the redesign.
The website’s redesign will go into effect in beta form over the weekend before going live on Monday.
Last night, the company partied like it was 1982 in a relaunch gala at the Smithsonian, where guests were expected to include: Newark Mayor
Cory Booker, Republican National Committee Chairman Reince Prie
Gannett Co., the paper’s parent, has also been getting into the festive mood. Its shares hit a 52week high yesterday of $17.61 before easing a bit in the afternoon to close at $17.46. They are up 30.6 percent this year.
Gannett is scrambling to offset declines in national advertising revenue — off 17 percent in the second quarter — with an “all access” subscription plan across its entire newspaper chain, except for USA Today.
The flagship title’s website will continue to be free.
Gannett is also aggressively boosting subscription and singlecopy prices. While that is hurting circulation in some markets, advertisers seem to be having no negative reaction.
The healthy rise in the share price is being fueled, in large part, by Gannett’s 23 TV stations, which account for 39 percent of its cash flow. They benefitted from Olympic advertising and political ads.
Gannett is also making some big bets on newspapers.
The redesign of USA Today is not unprecedented. Two years ago, thenpublisher Dave Hunke unveiled a redesign that he boasted was positioning the publication for the future. Actually, it did little to stem declines — or halt layoffs.
But today’s bet, which scrapped the familiar square logo in favor of new rounded one, is clearly the biggest redesign since the paper was launched by Al Neuharth on Sept. 15, 1982. The sports and lifestyle sections will get much bigger play.
In May, Larry Kramer, a cofounder of financial news service Marketwatch.com, took over as president and publisher, and many see it as his big play to leave his stamp on it.
“I absolutely agree this is Kramer’s big gambit,” said Douglas Arthur at Evercore, who was expected to be at the Smithsonian last night for the unveiling. “The USAT franchise desperately needs a redo with more online engagement and greater integration with video…we shall see.”
USA Today, which once had the biggest paid circulation of any newspaper, lost that title to the Wall Street Journal, which is able to count its paid digital subscriptions as part of its paid circulation. (News Corp. owns WSJ and The Post.)
USA Today’s print circulation is a little less than 1.8 million, down from its peak of 2.3 million.
Kramer is pushing for faster delivery of news over a variety of platforms.
“You expect to get news on your phone right when it happens and we’re going to give it to you faster than anyone else,” he told Wall Street analysts earlier this year.
To increase revenue, about 62 of Gannett’s community newspapers are behind paywalls now — with a target of getting all 82 behind a paywall by yearend.
“They still need to turn around the newspaper business, which will be a challenge,” said Alexa Quadri of JPMorgan. She remains skeptical and has the stock rated only “neutral.”
Quadri said the threeyear turnaround plan unveiled by new CEO Gracia Martore shortly after she took over in February is in its “early days at both community publishing and USA Today.”
Michael Kupinski at Noble Financial is bullish, especially on the prospects of the allaccess plan.
“Wall Street estimates do not appear to give the company credit for the exceptional and significant ramp up in circulation revenues,” he said.
The revenue increase could exceed 14 percent, while others, he said, are predicting possibly only a 4 percent boost.
“This is a big bet and the beginning of a new USA Today,” said Ed Atorino, an analyst at Benchmark Capital.
Now, he says, he has a “buy” on Gannett stock and may have to adjust his target stock price above his current $18 level.
Still, as some critics point out on the Gannett blog — and independent blogger sites — it has been four years since the stock last crossed the $20 threshold. Bill Smead, a portfolio manager with the Smead Value Fund, said, that with the current dividend, “you could get all your money back in five years. “The dividend doesn’t have to go up very much for us to make money,” he said.
And he said that as the kids of the aging baby boomers begin moving into suburbia, he thinks USA Today and community newspapers will have a resurgence. “People have underestimated brand power throughout the recession.”