[opendtv] Scripps Spins Off TV Sector
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 2 Jul 2008 09:34:22 -0400
This short story says volumes...
Seems like everyday we are hearing about the declining fortunes of
the newspaper business. This month there have been major layoffs at
newspapers around the country - the culprit is declining display ad
revenues, triggered in large part by declining readership, with much
of what is left in the >50 year old demographics.
We hear far less about the declining fortunes of local TV
broadcasters, however, the story is similar. Declining ratings and
older demographics for what remains.
The headline of this story is a tiny bit misleading. One might assume
that Scripps, one of the few operators of cable networks not owned by
the big five media conglomerates, has spun off both the cable
networks and their TV stations. But that assumption would be wrong.
The new Scripps Networks Interactive is made up of the company's
cable networks and related Internet-based businesses. The older E.W.
Scripps Company will retain control of their newspaper assets and
local broadcast stations, and Internet businesses related to these
assets.
The last sentence of the first paragraph says volumes - "to unlock
growth likely hindered by old-line newspaper and local TV station
businesses..."
Regards
Craig
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=85893&Nid=44537&p=428449
Scripps Spins Off TV Sector
by David Goetzl, Wednesday, Jul 2, 2008 8:31 AM ET
The new entity, with HGTV and Food Network leading the way, became a
separate, publicly traded company Tuesday and saw its shares rise 3%,
even as media stocks have struggled lately. Scripps Networks
Interactive was split off from the E.W. Scripps Co. in a bid to
unlock growth likely hindered by old-line newspaper and local TV
station businesses.
In that vein, reflecting investors' lack of enthusiasm for the new
E.W. Scripps, that company's share price on its first day was flat at
$3.07. It operates newspapers in 15 markets and 10 local stations.
The new Scripps Networks Interactive (SNI) is led by Ken Lowe, who
previously headed the combined E.W. Scripps. While Scripps' cable
networks--which also include Fine Living, DIY and Great American
Country--are based in Knoxville, Tenn., Lowe will continue to operate
out of SNI's corporate offices in Scripps' long-time Cincinnati home
base.
SNI shares increased $1.20 each to close at $39.75 Tuesday. The 3%
rise outpaced the Dow's .28% gain. It's possible that the company was
initially priced too low, and it could now suffer the fate of media
stocks that have tumbled of late.
Scripps' cable networks have grown consistently--prompting the split
and yielding a 15% increase in first-quarter revenue this year to
$311 million. Ad revenue jumped 15% to $236 million with a strong
scatter market.
In 2007, HGTV contributed 38% of the would-be SNI's revenue, Food
Network accounted for 31%. Interactive assets such as uSwitch and
ShopZilla accounted for 18%.
The prospects for the new E.W. Scripps remain murky. In the first
quarter, newspaper revenue was down 8.3% to $156 million (ad dollars
dropped 10%). Another trouble spot: Even as newspaper chains are
experiencing falling ad dollars, revenues at online
operations--although small--are generally increasing, but Scripps'
were flat in Q1 at $10 million.
Local TV revenue was down slightly ($500,000) versus Q1 in 2007.
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