The E.W. Scripps Company is joining a long line of media companies moving to consolidate television operations and spin off its newspapers.
Scripps (SSP), the fifth-largest independent TV group in the U.S., is splitting its operations into two separately-traded public companies, the company announced Wednesday. Scripps, based out of Cincinnati, Ohio will own and operate TV and radio stations. A newly-formed Journal Media Group, based in Milwaukee, Wis., will take over the newspaper publishing, including the Milwaukee Journal Sentinel.
The spinoff follows similar moves by larger news peers: News Corp. divorced the Wall Street Journal and other print entities from Fox News and additional broadcast assets, which were renamed 21st Century Fox. Time Warner spun off Time Inc. (the publisher of Fortune) earlier this year, and Tribune Co., parent company of the Chicago Tribune and Los Angeles Times, will spinoff its publishing unit on Monday.
21st Century Fox (FOX) and Time Warner (TWX) have both seen significant stock gains, 11.9% and 22.5% respectively, since making the move to divide off their publishing businesses.
Scripps is hoping it can see a similar boost. The company’s stock is down 5.2% year-to-date. Though, shareholders seem to be cheering up after the deal announcement. Scripps stock jumped 10% Thursday.
Scripps CEO Rich Boehne, who will remain at the helm of the broadcast business, believes “this deal should unlock significant value as both companies gain efficiency, scale and more focus on the industry dynamics unique to these businesses.”
The new Journal Media Group, which is expected to have annual revenue of more than $500 million, could also look forward to healthy returns post-spin off. Time Inc. (TIME) has gained 5.5% since going solo June 9, and News Corp. (NWS) is up 11.9% since its debut last year.