Gannett Co. Inc. announced today it plans to spin off its print operations, including USA Today and The Des Moines Register, becoming the latest media company to break itself up, The New York Times reported.
Gannett's separation of its publishing business will be implemented through a tax-free distribution of its publishing assets to shareholders, the McLean, Va.-based company said in a press release. The transaction "will create two focused companies with increased opportunities to grow organically across all businesses as well as pursue strategic acquisitions," it said.
Gannett also confirmed that it would buy out the 73 percent of the auto sales website Cars.com that it does not already own for $1.8 billion, adding another digital asset to its portfolio.
The separation follows in the footsteps of many other media companies - from Rupert Murdoch's News Corp. to Time Warner Inc. to E.W. Scripps - that have spun off their print arms in recent years.
Such transactions are intended to free faster-growing television and other media operations from slower-growing newspaper and magazine businesses, pushing up stock prices while allowing each division to focus on its own needs. Investors have shown far more appetite for broadcast assets than for newspapers, which have continued to struggle as advertising revenue has declined.
Gannett said its broadcasting and digital company, which has yet to be named, will be the biggest independent group of television stations in the top 25 markets, with 46 stations that it will own or service. The company will be the biggest affiliate group for both NBC and CBS.
ELBERT EXTRA: What the Gannett spinoff could mean for the Register
It's going to take time to sort out all of the implications of Gannett's announcement, but here's one likely scenario: A bust-up of the newly created print-only division by selling off the properties, including the Register, to buyers in their home communities. Read more