Allen Neuharth -- chairman of Gannett Co. and the mastermind behind USA Today -- is something of a showman. Also, something of a showoff. He's just finishing a six-month, well-publicized national tour in his BusCapade USA. In the lobby of the USA Today building he's erected a bust of himself. He may also have brought forth the most interesting and important innovation in newspapering in at least a decade.
A lot of journalists detest USA Today. I'm not one of them. It bursts with intriguing information. Last week we learned there are 25,000 Americans who are 100 or more -- 10 times the number in 1950. Already, other papers are adopting its imaginative use of tables, charts and graphics. More important, it's helped redefine the concept of "news" by focusing on social trends, population shifts and economic changes that other papers often ignore. Sometimes the paper's formula slips into silliness, as in a story that proclaimed: men, women: we're still different. Mostly, though, USA Today informs and engages. Not every paper has to imitate The New York Times or The Washington Post. Diversity is good.
But the story of USA Today is compelling as more than a debate over its journalistic worthiness. It's a superb example of the vast powers of top corporate managers to indulge their personal whims with other people's money -- their shareholders'. That's not a moral judgment, but a statement of fact. The power can be used for good or ill. Opulent offices, wasteful mergers and white-elephant projects often result. So do important innovations. Typically, the creative process demands more than neat financial projections. It requires personal vision, commitment and enthusiasm.
What's wrong is the simplistic notion that business leaders are always detached and calculating. The myth of the well-oiled corporation run by expert managers is -- despite all the problems of U.S. companies in the past decade -- one that endures as an ideal. Executives like to project it, because it flatters their self-image. But the ideal is a fiction. Business decisions that are supposed to be cool and logical are often highly personal and passionate. Pick up the corporate shell, and there's egomania.
Thanks to Neuharth's own ego, we have a rare peek beneath the shell. He prefers notoriety to anonymity. He had one of his own editors, Peter Prichard, write about USA Today's founding. Neuharth opened the company files and didn't censor the results. As a result, Prichard's book ("The Making of McPaper") is candid and compelling. No one will finish it thinking Neuharth is a sweet fellow. His consuming ambition to create a national paper often makes him cruel and ruthless. He can chew up executives like a garbage disposal. In five years USA Today has had six presidents.
Nor will anyone think that Neuharth started USA Today merely as a rational business investment: What drove him forward was a quest for prestige. "USA Today has put the Gannett Company in the major leagues," Neuharth writes in one memo. Although Gannett owns the largest newspaper chain, most of its papers (now numbering 90) are in small towns and medium-size cities. Neuharth wanted a national presence. Three of the company's four other top executives opposed starting USA Today. The chief financial officer foresaw massive losses. Well he might have. Through 1987 the cumulative pretax losses will total $445 million, estimates analyst R. Joseph Fuchs of Kidder, Peabody & Co.
But Neuharth's obsession also earns grudging admiration. USA Today is still here. It turns five this week, and survival no longer seems in doubt. Advertisers are accepting the paper's permanence, and 1987 lineage is up more than 20 percent. The paper's fully paid circulation (1.3 million) is respectable, though still behind The Wall Street Journal (2 million) and the news weeklies -- Time (4.7 million), Newsweek (3.2 million) and U.S. News & World Report (2.4 million). Losses are now low, and with some optimistic assumptions, solid profits could soon emerge.
Few outsiders thought the paper would last. Americans didn't need it. They were already drowning in information. Nationwide production and distribution problems would be horrendous. Many forecasts turned out to be true. Getting news racks around the country was a nightmare. There are now about 118,000 of them, but about 20,000 (worth more than $4.4 million) have been lost, stolen or vandalized. For two years USA Today could hardly give away its ads. In 1983 an average issue had less than seven ad pages. The paper could have died, but Neuharth wouldn't let it.
He was everywhere. At the beginning he wrote headlines and edited stories. He was a constant critic. After the paper printed a wrong World Series schedule, he fired a memo to editor John Quinn: "Can't we find someone on the Page 1 desk who can add, subtract read and think... ." A circulation executive spent his weekend boning up for a meeting with Neuharth. It seemed to go well. But Neuharth had no praise, only an angry question: "How come we don't sell papers at the airport in Missoula, Mont.?"
Was this determination daring management or ambition gone wild? The real point is that Neuharth had the opportunity to make the gamble. Gannett's other managers couldn't stop the project. Neither could a sometimes skeptical board of directors. Neuharth could take the risk because Gannett's other papers are sufficiently profitable to support the large losses of USA Today. Uncle Sam also provided an implicit subsidy, because USA Today's losses sheltered other profits from taxes. Counting these savings, Gannett estimates after-tax losses on USA Today at $233 million.
Popular wisdom holds that the age of autocratic business tycoons has long passed. Modern managers are supposed to be more restrained and rational. They rule less by whim. The contrasts are overdrawn. Personal drives and ambitions remain enormous, and executives have huge freedom to redeploy their companies' wealth. It's this discretion -- and the alternately creative and wasteful ways that it's used -- that makes corporate behavior so baffling. The main difference between now and then is that the process is less visible and more obscured by management mumbo jumbo. Only rarely does someone like Neuharth remind us what's really going on.