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Price cuts of single-copy weekday papers in outstate areas could increase losses by more than $1 million a year at the Detroit Free Press and about half that much at The Detroit News.
The News announced it was dropping the single-copy outstate price from 20 cents to 15 cents, and the Free Press quickly matched the price-reduction.
Newspaper analysts called price-slashing by The News a direct attack on the Free Press's outstate circulation lead.
Local advertising agencies that buy advertising in both papers said any potential circulation increases outstate would have to effect on increases outstate would have no effect on bulk of both newspapers' revenues, look for circulation in the area of dominant influence (ADI) of Wayne, Oakland, Macomb, St. Clair, Lapeer, Livingston, Monroe and Washtenaw counties.
The price reduction surprised many newspaper analysts who had predicted that Gannett Co. Inc., new owner of The News, would raise circulation prices at The News, a strategy it has pursued with other papers.
"Gannett's planning on playing hardball," said Barry Kaplan, a media analyst for Goldman Sachs & Co. in New York City.
Kaplan said Gannett is trying to put itself in the dominant position before any possible negotiations for a joint operating agreement (JOA) with its rival, and sending Knight-Ridder Newspapers Inc. a signal that...