Keith J. Kelly

Keith J. Kelly

Media

Gannett splitting newspaper, broadcast businesses

Gannett president and CEO Gracia Martore revealed that it was going to be the latest to spin off its newspaper division from its TV operations.

One will have 46 broadcast stations and digital operations, including CareerBuilder.com, while the other will house USA Today and 81 local US daily publications — as well as Britain’s Newsquest, which has 17 paid daily papers spread across the UK.

“Even with all the growth of its broadcast business (most recently through the acquisition of Belo’s stations), it’s still a company that is defined, at least in part, by its newspaper roots,” Ken Doctor wrotes in the Nieman Journalism Lab on Monday.

“The standard three-word explanation for all these splits is the desire to “maximize shareholder value,” said Doctor.

“Media company CEOs split companies because it usually works,” Doctor said. “The newly established TV-plus businesses often assume the entire value, or close to it, of the old “combined” company.

The stand-alone newspaper company value may be relatively small, but now it’s icing on the re-frosted cake, Doctor said.

Investors like the clarity — in part, it’s optics. More importantly, it’s the projectability of future cash flow, he said.

Gannett Publishing, with its flagship USA Today, will keep the Gannett name and will be virtually debt free.

The TV side has yet to decide on a name.

The president of Gannett’s US Community Publishing division, Robert J. Dickey, will become CEO of the new Gannett company.

“The bold actions we are announcing today are significant next steps in our ongoing initiatives to increase shareholder value by building scale, increasing cash flow, sharpening management focus, and strengthening all of our businesses to compete effectively in today’s increasingly digital landscape,” said Martore, who will be CEO of the yet-to-be named TV operation.