Despite forecasts of economic recession next year, the Gannett Co. expects advertising business to grow modestly for its group of newspapers around the country-numbering 78, the largest chain owned by any one publisher.
In addition, Gannett President Allen Neuharth is telling publishers of his company's newspapers here this week that despite a commitment to follow President Carter's wage and price guidelines, spending for news operations in 1979 will be boosted by 13 percent.
"We're going to put more money into the product (newspaper content) even if we have to scratch harder on the revenue side," Neuharth said in an interview yesterday.
Neuharth made his remarks during a break at a three-day meeting for all Gannett publishers and other top corporate officials-about 135 of them-that is being held at the Capital Hilton hotel.
Ironically, the Gannett meeting will continue into Thursday-the same day the Federal Trade Commission begins a controversial symposium on concentration of media ownership, in which Neuharth and other leading newspaper company executives have declined to participate.
The Gannett chief executive called the FTC program a "kangaroo court" and contended that by the time his industry was asked to take part, the "cards were stacked" against newspaper owners and that "any people . . . with constructive thoughts will be overshadowed" by critics lined up earlier.
Neuharth also said he expects Gannett's merger with Combined Communi cations Corp., which will create a billion-dollar media conglomerate, to be consummated early next year if the Federal Communications Commission approves broadcast ownership changes in volved.
Combined, based in Phoenix, owns 7 television stations, 13 radio stations, 2 newspapers and a large outdoor advertising business in this country and Cananda. In addition to 78 newspapers in 30 states and 2 U.S. territories, Gannett owns the Louis Harris polling firm and broadcast properties; the Rochester, N.Y., firm has agreed to sell its TV station there to a black-controlled company and CCC will sell radio stations in Phoenix to comply with FCC rules on maximum broadcast ownership.
While Neuharth declined to froecast Gannett results, because of Securities and Exchange Commission rules on disclosure while a merger is pending, Wall Street analysts have predicted that Cannett sales this year will reach $650 million, up some 17 percent from $558 million in 1977.
John Morton, of John Muir & Co. here, has forecast Gannett earnings in 1978 of $3.10 a share compared with $2.60 in 1977. For the first nine months of 1978, the firm's profits rose by 21 percent to $57 million ($2.13 a share) compared with $47 million ($1.77), as sales rose 22 percent to $487 million.
Meanwhile, in other media business developments:
The Justice Department's antitrust division recommended approval for a proposed consolidation of production operations for the Cincinnati Post and Cincinnati Equirer. The Post owned by Scripps-Howard, sought consolidation as a "failing" newspaper that otherwise would be closed. Attorney General Griffin Bell now must make a decision about the combination, which is opposed by newspaper unions and some Cincinati businesses.
Justice Department attorney Gerald Connell, who heads the department's newspaper antitrust section, said the Post had annual losses of between $1 million and $4 million over the past five years. The Enquirer is owned by Combined Communications and would become part of the Gannett chain, which would print the rival daily while Scripps retains editorial control of the Post and a share of profits.
Stating that the "climate is chaing" for newspaper ownership of broadcast properties in the same cities, the Newhouse newspaper chain's broadcasting company has agreed to sell its five TV stations to Times Mirror Corp., of Los Angeles, for $82.4 million.
If approved by the FCC, Times Mirror would gain a full complement of permitted TV properties-five VHF and two UHF stations, picking up Newhouses's WAPI in Birmingham, KTVI in St. Louis, WSYR in Syracuse, WSYE in Elmira, N.Y., and WTPA in Harrisburg, Pa. Newhouse, secound-largest of U.S. newspaper chains in ferms of daily circulation, publishes dailies in each of the cities but Elmira. Times Mirror currently owns the Los Angeles Times, Newsday on Long Island, the Dallas Times-Herald, and TV stations in Austin and Dallas.
In the interview with Gannett's Neuharth yesterday, he said the company expects advertising lines in its newspapers to increase between 1 percent and 2 percent next year. But he also noted that Gannett forecasts are on the conservative side, with ad lineage gains of 9 percent this year far exceeding projections of 2-4 percent, one year ago.
For the first 10 months of 1978, Gannett advertising revenues jumped 15 percent to $404 million and Neuharth said that the small and medium sized communities where most Gannett papers are published "are a little less pessimistic or more optimistic" about the economy than general forecasters.
Sunday circulation of Gannett papers increased about 3 percent this year (the firm has started 12 new Sunday papers in three years) while daily circulation was flat at about 3 million ( morning paper circulation increased slightly and afternoon circulation declined slightly), which Neuharth said is an indication that declining readership of recent years has been arrested.
Additional news gathering spending next year will vary from paper to paper, with some adding space and other publications adding to their staffs, he stated. In addition, the Gannett News Service, which serves company papers from a recently enlarged Washington bureau and offices in state capitals, will again be expanded in 1979 following an investment of #3 million this year.
Neuharth emphasized his view that chain papers, because of the size of parent companies, are not necessarily weaker editorial products than independent newspapers.
"The major change in the last few years is that newspapers large and small-and it's more true for the small ones-have far greater diversity of news and views . . . than ever before." he asserted. This reflects a "broader range of views available" from various columnists and a decision by publishers of small papers in groups and chains that "since they are the only game in town . . . let's get everyone into the game," in terms of viewpoints, according to Neuharth.