Sunday - Sep 24, 2017

Media giant Gannett to hive off their publishing operations


Media giant Gannett to hive off their publishing operations

Gannett, the largest U.S. newspaper publisher whose assets include the national newspaper USA Today and the weekly USA Weekend have announced that they are to become the latest media company to spin off their publishing operations as they get set to follow many other counterparts in the world of media through moving in the direction of digital.

According to a spokesperson for Gannett the time is now right to create two separate companies that we believe will each exceed the growth they have achieved under one umbrella, with advertising sales in the print media division being consistently affected by the shift of readers’ attention from print to digital.

Gannett’s first move in the direction of digital is a decision to pay $1.8bn in cash for the remaining 73 per cent stake of massive car information website Cars.com, which it does not own for, in the process instantly doubling the size of their digital business.

The break-up trend at media companies with Time Warner, News Corp, the Tribune Company all separating the digital and print media divisions as they struggle to come to terms with the changes in direction in the industry.

Despite the fact that Gannett intend to diversify their interests, placing less emphasis on publishing, there printed media division will still remain a force to be reckoned with, having contributed 60 per cent of total revenues in Gannett’s most recent quarter.

Gannett’s publishing unit, which not only includes USA today and USA Weekend, also boasts a father 81 daily US newspapers as well as Newsquest, a UK news group. The division is reportedly be almost totally free of debt unlike some of its competitors, most explicitly Time Inc, which recently spun off from Time Warner and was left with around $1.3 billion of net debt and, to a lesser extent, Tribune Publishing, publishers of the Chicago Tribune and Los Angeles Times,which started trading as an independent company just this week, carrying a $350 million debt burden.

Plans are that the still to be named broadcast and digital company will retain Gannett’s $4.6bn in net debt. Its current portfolio includes 46 television stations reaching nearly a third of US television households, as well as CareerBuilder.com, a job search website, as well as Cars.com.

On the news of the reorganisation Gannett shares dropped by 1.3 per cent to $33.87 by close of trading in New York.

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