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E.W. Scripps (NYSE: SSP) says its board has approved a plan to split itself into two separate companies. Scripps Network Interactive, which consists of the company’s cable networks and internet properties, will be spun off to shareholders, while E.W. Scripps will hold onto its newspapers and broadcast TV stations. The move comes just over two weeks after Belo (NYSE: BLC) announced a move to split itself up, spinning off its newspaper business from its broadcast business. Release | Webcast More after the jump…
This move is all about unburdening Scripps Networks Interactive from the slow-growth broadcast and newspaper operations. According to the release, Scripps Networks Interactive has annual revenue of $1.4 billion and 2,100 employees, while E.W. Scripps has just $1.1 billion in revenue, but has 7,100 employees. SNI assets include HGTV, The Food Network, DIY Network, the Fine Living Television Network and Great American Country, along with its major internet properties, like Foodnetwork.com, Shopzilla.com and Uswitch.com, among others. Shopzilla, which was acquired in 2005, has struggled as of late, although management claims the site is starting to recover. The company also indicated that it’s likely to do more interactive acquisitions in the $25-$100 million range going forward. Following the separation, which is expected in Q208, current CEO Kenneth Lowe will become CEO of Scripps Networks Interactive, while E.W. Scripps will be helmed by COO Richard A. Boehne.
It seems likely that the market will be very happy about this news, as moves to unlock value are almost always cheered. Belo shares jumped nearly 19 percent on the day it announced its split.
Rafat adds: Does this mean the newspaper part can now be sold off? Some speculation to this effect came out early this year, which the company later denied…see related links below.
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