The Battle For Affluents Outside Atlanta   

When the Gwinnett County, Georgia-based Daily News started home delivery recently in demographically attractive territory that had always belonged to the Atlanta Journal and Constitution, its reporters and editors talked of war. One reporter called it a "red alert."

In a battle update, the Audit Bureau of Circulation's report this fall led the long-entrenched Atlanta Journal and Constitution to declare victory in a crucial early skirmish. The Daily News numbers within Gwinnett County, northeast of Atlanta, had slipped – though only from 43,871 daily to 43,393, less than 500 copies – for the first time since the New York Times Co. bought it in 1987, for what one analyst estimates was the highest price per subscriber ever paid for a newspaper.

The ABC numbers compare average circulation for the six-month period that ends September 30 each year.

The News's search for new pasture to graze touched a nerve when it started dropping papers on the doorsteps of the Journal and Constitution's potentially best customers, DeKalb County residents who represent some of the metropolitan area's most desirable demographics.

The News has also dropped "Gwinnett" from the banner, added a "Metro Edition" bug above the fold and blanketed suburbs north and south of Atlanta with more than 500 new racks and newsstand displays.

Although circulation dropped within Gwinnett County, total numbers for the News are up about 1,000 daily to 48,830, according to the ABC. The News is selling thousands more papers in its push outside Gwinnett County, but they haven't shown up yet on the ABC reports, says News Circulation Director Robert Bobber.

Circulation is also getting a boost from the 1,249 copies the News sells to schools, which pay for them with a grant from a foundation whose board includes News Publisher Thomas D. Jones.

The Journal and Constitution's own total circulation has taken a dive since the September 1990 ABC report, losing more than 34,000 on Monday through Friday and nearly 21,000 on Saturday. According to Vice President and General Manager Andrew A. Merdek, some of this was planned: Revenue was actually enhanced by distributing fewer papers, especially in far reaches such as south Georgia, and by increasing newsstand and subscription prices.

Jones and the president of the New York Times Regional Newspaper Group, Jack Harrison, declined to comment about Times Co. strategy in the Atlanta area. But Bobber says the News aims to be the paper for the northeast suburbs, a center of affluence within comfortable reach of its distribution network.

David Easterly, president of Cox Newspapers, the Journal and Constitution parent company, says that market is saturated. "They can't do any more in Gwinnett County. There are no more newspapers to sell there."

Conrad Fink, a journalism professor at the University of Georgia, wonders why the Times Co., by his calculations, forked over probably the highest price per subscriber ever paid for a newspaper when it bought the News. Fink reported in a 1989 Poynter Institute study that the Times paid $88.2 million for the 27,500-circulation daily, or $3,207 per subscriber. By comparison, Gannett Co. paid $688 for each subscriber to the Des Moines Register in 1985. The Times Co. invested another $40 million in a new headquarters and production facility.

George Kennedy, associate professor at the University of Missouri School of Journalism and managing editor of the daily Missourian, speculates that the Times Co. paid the high price to get in on the ground floor in Gwinnett, an area the company must have sensed could grow like kudzu. The county population more than doubled in size during the 1980s to 352,000.

But Fink notes that Times officials failed to predict how strongly the dormant Journal and Constitution would react when stirred awake.

"They're like poker players," Kennedy says of the Times Atlanta enterprise. "They're losing so far, so they're doubling their bets. You either recoup your losses or you go bust."