Scripps splits media into old and new
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KAI RYSSDAL: Remember back in grade school when you had the cool kids, and then the losers? The Scripps media company took a page from the fifth-grade handbook today: broadcast darlings like HGTV and the Food Network on one side, old-media slackers like daily newspapers on the other. Marketplace’s Jeff Tyler has more.
Jeff Tyler: The new Scripps Networks Interactive will include TV properties, like the Food Network, as well as online businesses like Shopzilla. The E.W. Scripps Company will retain the newspapers and broadcast television stations.
Gary Arlen once worked as a Scripps paperboy — now he’s president of the research firm, Arlen Communications. He says the Scripps split is part of a larger trend.
Gary Arlen: It joins the parade of other media companies, such as CBS/Viacom, Belo and even the Tribune Company, which have been looking at how to split their dinosaur component, which is the old media, and the gazelle — the new, fleet, young new-media, digital media businesses.
Arlen says that separating out these struggling newspapers appeals to investors:
Arlen: Wall Street seems to like that kind of movement.
In fact, stock in the company shot up more than 8 percent today on Wall Street.
Porter Bibb: The street really does not give any credence or investment value to the future of newspapers. But I’m not so sure the street is right.
That’s Porter Bibb with Mediatech Capital Partners. He thinks newspapers can be worth more, if managed properly. And Bibb says that dividing the company could fragment Scripps management and leadership.
Bibb: It takes away some of the potential synergies that were the rationale for building these media conglomerates in the first place. And basically, it covers up a failure to make the transition from old media to the new media.
Though he disagrees with the strategy, Bibb expects other media companies will embrace this dichotomy — where new media get the glory and newspapers get used to wrap dead fish.
I’m Jeff Tyler for Marketplace.
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