Market Overview

5 Recent Big Media Spinoffs

5 Recent Big Media Spinoffs

Gannett’s (NYSE: GCI) announcement last Tuesday that it planned to spin off its print business, including USA Today, into a separate company was only the latest of several recent media spinoffs.

Here's a look at how the deal stacks up against the others.

The Debt Question

Gannett’s plan to separate out its publishing business “virtually debt-free” contrasts with other recent spinoffs, including Time Warner’s (NYSE: TWX) release of Time (NYSE: TIME) with $1.3 billion in debt and Tribune Media's decision to spin off Tribune Publishing (NYSE: TPUB) with the latter carrying $350 million in debt.

Financially the move is similar to the Journal Communications (NYSE: JRN) and E.W. Scripps (NYSE: SSP) plan to break out combined print operations with little or no debt, but not as attractive as Rupert Murdoch’s decision to give his News Corp (NASDAQ: NWSA) print operations a $2 billion cash reserve “parting gift.”

Each of the recent media spinoffs have additional shared and unique features.

Related Link: Fox's Canceled Deal With Time Warner Ranks As Second Largest In U.S. History

News Corp

As the media spinoff with the most “history” -– given the fact it happened in 2013 -– Murdoch’s venture has provided some insight for spinoff newcomers.

News Corp said Thursday it posted a profit in the fourth quarter, versus a $1.94/share loss a year ago. The profit, however, at two cents/share, fell short of the three cents analysts expected. Revenue fell 3 percent.

After more than a year as a standalone TV and movie properties company, 21st Century Fox (NASDAQ: FOX), reported Thursday total revenue of $31.9 billion, up 15 percent over a year ago. Reported net income for the year was $3.8 billion, or $1.67 per share.

Time Warner

Time Warner spun off its publishing arm, Time, earlier this year. Time, which publishes People, Time Magazine and Sports Illustrated, has seen growth for its shares of 4 percent since June.

Time Warner, including HBO and Warner Bros. studios, has seen its stock shoot up 24 percent in value over the same period.

Journal Communications and E.W. Scripps

More recently, Journal Communications and E.W. Scripps struck a deal in which the two companies would combine broadcast operations into one company set to operate under the Scripps banner.

Newspaper holdings, according to the agreement, would become a separate publicly traded entity named Journal Media Group.

That deal was expected to close sometime in 2015.

Related Link: Top 4 Stocks In The Publishing-Newspapers Industry With The Highest Revenue

The Tribune

Last week the Tribune spun off its newspaper business under the name Tribune Publishing. That action had been in the works for about a year. Tribune Publishing includes the Los Angeles Times, Chicago Tribune and others.

The second half of the business, Tribune Media would run 42 local TV stations and cable channel WGN.

At the time of this writing, Jim Probasco  had no position in any mentioned securities.


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