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NAA Update

NAA Update. Status of Valassis NSA Postal Rates Elimination of Saturday Delivery. Status of Valassis NSA . NSA Filed with PRC on April 30 Opposition Leads to Extended Review PRC Approves NSA in August (4-1 vote). The Lone Dissenter.

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NAA Update

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  1. NAA Update • Status of Valassis NSA • Postal Rates • Elimination of Saturday Delivery

  2. Status of Valassis NSA • NSA Filed with PRC on April 30 • Opposition Leads to Extended Review • PRC Approves NSA in August (4-1 vote)

  3. The Lone Dissenter • “Too much evidence was presented…by many opponents of this NSA for me to conclude that it would not cause unreasonable harm to the marketplace.” • - Commissioner Tony Hammond

  4. NAA Challenges Decision • NAA Lawsuit Filed on Day of PRC Decision • Supported by NNA / Valpak/ Newspaper Guild • Written Briefs in Spring/Oral Argument in May • Decision Late Summer • Congressional Opposition to NSA Continues

  5. Valassis Introduces Spree

  6. Status of Spree Implementation • Phoenix / Atlanta Test Markets • Rob Mason, Valassis CEO (Feb 21): • “It’s a Challenge to • Pull Together Package.” • Package Launch Moved to 2ndQ

  7. Questions?

  8. Postal Rates • USPS Listens to NAA / Creates • “High Density Plus” • No Rate Increase for HDP in 2013 • Opens Door for Narrowing Rate Gap • Dialogue on USPS/Newspaper Partnership

  9. Questions? Questions?

  10. Elimination of Saturday Delivery

  11. USPS Financial Challenges • $15.9B loss in FY 2012 • $11.1B Default to U.S. Treasury • $15B Borrowing Authority Exhausted • Low Cash Flow

  12. Changes to Mail Delivery • Six Days of Package Delivery • Five Days of Mail Delivery • Mail Delivered to Post Office Boxes • Savings = $2B Annually

  13. Impact on Newspapers • Community Newspapers Rely on USPS • Opportunity for Daily Newspapers • - Delivery of Magazines/Catalogues • - Advertiser Dissatisfaction with Service • Dialogue on Opening Up the Mailbox • Negative - USPS Targets Ad Inserts in Select Markets

  14. Obstacles to Eliminating Saturday Delivery

  15. Congressional Action to Preserve Saturday • USPS Receives $78 Million in Fed. Funding • Legislative Rider Requiring 6-Day Delivery • USPS – “We Won’t Take the Money” • - Trading $78 Million for $2 Billion • - Achieve 6-Day with Package Delivery

  16. Possible Outcomes Scenario # 1: - USPS Ignores Directive from Congress - Eliminates Saturday Delivery on August 5 - Letter Carriers File Lawsuit on Same Day Scenario # 2: - Congress Adopts Postal Legislation - Two-Year Delay Until GAO Studies

  17. Questions? Questions?

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