E.W. Scripps, Journal Merging Broadcast Ops
The E.W. Scripps Co. and Journal Communications have agreed to merge their broadcast operations and spin off and then merge their newspapers, creating two separately traded public companies.
The merged broadcast and digital media company, based in Cincinnati, will retain The E.W. Scripps Co. name, and the Scripps family shareholders will continue to have voting control. The company will have approximately 4,000 employees across its television, radio and digital media operations and is expected to have annual revenue of more than $800 million.
The newspaper company will be called Journal Media Group and will combine Scripps’ daily newspapers, community publications and related digital products in 13 markets with Journal Communications’ Milwaukee Journal Sentinel, Wisconsin community publications and affiliated digital products. The company, with expected annual revenue of more than $500 million and approximately 3,600 employees, will be headquartered in Milwaukee.
The Scripps and Journal Communications boards of directors have approved the stock-for-stock transactions, which are subject to customary regulatory and shareholder approvals.
The deal is expected to close in 2015.
When the deal closes, current Scripps shareholders will own 69% of the new Scripps broadcast company and 59% of the new Journal newspaper company. Current Journal shareholders will own the remaining minority stakes in the two companies.
Scripps shareholders of record just prior to the closing will receive a $60 million special dividend.
The companies project about $35 million in combined transaction synergies in the near term.
The new Scripps broadcast company will become the 11th largest TV station group, according to the TVNewsCheck/BIA/Kelsey ranking, which is based on TV revenue.It will operate 34 TV stations reaching 18% of TV homes. It will also operate 35 radio stations in eight markets, all former Journal properties.
“In one motion, we’re creating an industry-leading local television company and a financially flexible newspaper company with the capacity and vision to help lead the evolution of their respective industries,” said Rich Boehne, chairman, president and CEO of The E.W. Scripps Co., who will continue at the helm of Scripps. “Making the combinations even more appealing are the rich histories of these two organizations, both driven by a deep commitment to public service through enterprise journalism. For shareholders, this deal should unlock significant value as both companies gain efficiency, scale and more focus on the industry dynamics unique to these businesses.”
“This transaction will create two solid media businesses that will continue to serve their communities with a commitment to integrity and excellence that has been built over many years,” said Steven J. Smith, chairman-CEO of Journal Communications. “Journal’s radio and television stations will add depth and breadth to the Scripps TV group and additional expertise to its management team. The formation of the new Journal Media Group, headquartered in Milwaukee, will continue a tradition of exceptional print and digital journalism in 14 markets across the country. These companies will offer a combination of excellent local media assets and an incredible array of talent in our employees. We look to the future with great optimism and a continued sense of purpose in providing relevant, differentiated content to our local communities across the country.”
Tim Stautberg, senior vice president, newspapers for Scripps, will become president, CEO and a director of Journal Media Group upon completion of the transaction.
Journal Communications’ Class A and Class B shareholders will receive 0.5176 Scripps Class A Common shares and 0.1950 shares in Journal Media Group for each Journal Communications share. Scripps shareholders will receive 0.2500 shares in Journal Media Group for each Class A Common Share and each Common Voting Share they hold in Scripps.