Scripps Plans To Split Cable, Newspapers
E.W. Scripps Co. said Tuesday that it wants to split itself into two publicly traded media companies, one focusing on its fast-growing cable operations and its online shopping services and the other on its slumping newspaper business and local television stations.
The company's stock jumped more than 7 percent.
Under the plan, Scripps shareholders would receive stock in Scripps Networks in the form of a tax-free dividend.
"Needless to say, this is a significant development in the history of this great media company," Kenneth W. Lowe, Scripps' president and chief executive, told analysts.
"For nearly 130 years, the E. W. Scripps Co. has prospered by staying ahead of industry trends and market forces that affect our businesses. The transaction announced this morning is the next logical step in the company's evolution."
Scripps Networks Interactive would include HGTV, the Food Network, DIY Network, Fine Living Television Network and Great American Country along with online comparison shopping services Shopzilla and uSwitch.
E.W. Scripps Co. would include newspapers in 17 U.S. markets, 10 broadcast television stations, a character licensing and feature syndication business operated by United Media and Scripps Media Center in Washington, D.C.
"It's our intention to create two publicly traded companies, each with a sharpened strategic focus that would foster continued growth, solid operating performance and a clear vision on how best to build on the specific strengths of our national and local media franchises," Lowe said in a statement.
Scripps' announcement comes two weeks after media company Belo Corp. said it plans to spin off its newspapers, which have been struggling to keep readers and advertising dollars, into a new company that will operate separately from its 20 television stations.
Scripps' stock jumped $3.11, or 7.4 percent, to $45.39 in trading Tuesday. The stock has traded between $37.89 and $53.39 in the past year.
Scripps said the split could be completed in the second quarter.
In a time of declining newspaper circulation, Scripps has aggressively diversified with popular cable TV networks, Shopzilla and uSwitch.
Scripps' newspapers include the Rocky Mountain News in Denver, the Commercial Appeal in Memphis, Tenn., the Knoxville (Tenn.) News Sentinel and the Ventura County (Calif.) Star.
It said in July that it will end publication of The Cincinnati Post and The Kentucky Post on Dec. 31.
Lowe is expected to become president and CEO of Scripps Networks. Richard Boehne, executive vice president and chief operating officer, is expected to become president and CEO of E.W. Scripps.
The corporate headquarters for both companies would be in Cincinnati.
The deal needs final approval by company's board along with shareholders. It also is contigent upon a favorable ruling from the Internal Revenue Service on the tax-free nature of the transaction.