E.W. Scripps Co.
(NYSE:SSP) is the latest newspaper and media company to undergo
a facelift to better face challenges and opportunities online.
The company proposed a spin-off that would allow investors to choose
from the growth potential of new media or the dependable cash flow of
old media.
The tax-free deal would create a new public entity
containing the company's cable operations - including Food Network and
HDTV - along with its internet operations - including Shopzilla and
uSwitch. Meanwhile, SSP will retain the company's newspapers,
television stations, licensing and syndication operations.
"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," said
chief executive Kenneth Lowe in a statement.
The past 24 months
have been very difficult for old media companies as online publishers
continue to eat into margins and reduce subscription rates. Companies
like the Wall Street Journal and New York Times are even feeling the
crunch and an industry shift has become all but inevitable.
Consequently,
this move to divest new media from old media comes at the perfect time
for shareholders and represents perhaps the company's only logical next
step. Combined, these factors make SSP a stock
worth watching closely!
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