Scripps board votes for split
EmptyNEW YORK - The board of E.W. Scripps Co. has unanimously approved a plan to separate the media firm into two publicly traded companies - one centered around its national lifestyle cable networks and the other on local media franchises.
This is the latest decision by a media company to separate in an attempt to boost its stock price after Belo Corp. recently said it will separate its TV stations and print operations.
Echoing some of the themes mentioned as a rationale behind the Viacom Inc.-CBS Corp. split, Scripps president and CEO Kenneth Lowe said the two entities will each have “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."
Scripps management earlier this year said they had looked at a possible spin-off of its newspaper business amid sluggish stock valuations for print media companies. However, restrictions in the Scripps family trust made such a move difficult.
In the split plan unveiled Tuesday, the separation would work somewhat differently.
Scripps Networks Interactive would consist of the firm's Scripps Networks cable channel unit, which includes such brands as HGTV and Food Network, and the related Internet businesses, as well as online comparison shopping services Shopzilla and uSwitch.
These businesses have combined annual revenue of approximately $1.4 billion and 2,100 employees. Lowe would run them as president and CEO.
The second firm will retain the E. W. Scripps Co. name and include daily and community newspapers in 17 U.S. markets, 10 TV stations and other assets. These businesses have combined annual revenue of about $1.1 billion and employ about 7,100 people.
Richard Boehne, currently executive vp and chief operating officer is expected to become president and chief executive officer of that second firm.
The proposed separation would take the form of a tax-free dividend of stock in Scripps Networks Interactive distributed to all Scripps shareholders on a pro-rata basis. The deal is expected to be completed in the second quarter of 2008.
As is the case now with Scripps, both new companies would have common voting shares and Class A common shares. The Edward W. Scripps Trust, via its voting shares in both, would maintain control of both companies by electing a majority of board members for each.