CINCINNATI - In 2008, when the E.W. Scripps Co. spun its highly profitable cable division into a separate public company, newspapers accounted for 57 percent of total revenue. The newspaper division was nearly twice the size of Scripps’ $326 million television unit.
But TV will rule the roost for Scripps after 2015, thanks to a deal announced Wednesday with Milwaukee, Wisc. –based Journal Communications Inc. The companies plan to merge their combined newspaper assets into a new Milwaukee-based company, Journal Media Group, while Scripps will get the combined television and radio assets of both companies, with 4,000 employees and more than $800 million in annual revenue.
The deal will get the scrutiny of Wall Street analysts in a 10 a.m. conference call Thursday. But influential analyst Edward Atorino has already proclaimed the deal a winner.
“It’s a good deal for Journal Communications,” said Atorino, managing director of The Benchmark Company. “They get a lot of money. They become part of a much bigger company and their stock goes up, which has not been doing well lately. And for Scripps it answers the question. Can they break up the company? The answer is yes.”
Scripps is the parent company of WCPO. Senior Vice President Brian Lawlor runs its TV division. Lawlor spoke with WCPO about his plans for the unit, which will have 34 stations reaching 18 percent of U.S. households once the merger is complete in 2015.
"While we’re investing in television stations, what we’re really investing in is local media brands," Lawlor said. "The future of television remains to be written. There may be great evolution. But what I do know is that people are consuming more information than they ever have and video is a key element by which people are consuming that information. So, I think it’s an entrée through established brands that we’re getting into these markets and I expect television will only be part of what we do in the years to come."
Become a WCPO Insider to read more from the Scripps executive who helped engineer the deal and why the Scripps family agreed to let go of newspapers.