The two groups will remain controlled by the Edward W. Scripps Trust, which will elect a majority of board members for each company.
'Logical next step'
Kenneth Lowe, president-CEO of Scripps, is expected to assume the same title for Scripps Networks Interactive, which includes HGTV, Food Network, DIY Network, the Fine Living Television Network, Great American Country and their respective websites. The Scripps Networks grossed $1.05 billion in 2006 in revenue and affiliate fees.
"This is an important and logical next step for our shareholders, employees and all other stakeholders who have a direct interest in the success of our media businesses," Mr. Lowe said in a statement. "It's our intention to create two publicly traded companies, each with a sharpened strategic focus that would foster continued growth, solid operating performance and a clear vision on how best to build on the specific strengths of our national and local media franchises."
Richard Boehne, exec VP-chief operating officer of Scripps, is expected to become president-CEO of the E.W. Scripps Co., which includes daily and community papers in 17 U.S. markets; Scripps Media Center in Washington; 10 TV stations in the top 50-markets (including six ABC affiliates, three NBC affiliates and one independent) and the company's character licensing and syndication business, operated by United Media. The group's annual revenue is about $1.1 billion.
The Scripps Interactive Group has seen growth in recent years due to the market strength of its cable networks during upfront negotiations. Studies have shown the Scripps networks to have a higher commercial engagement than most cable networks, averaging a 5% audience drop-off during commercial breaks compared with the cable average of 8%-9% audience loss. As a result, it's gained increased interest from the investment community. Goldman Sachs analyst Peter Appert wrote earlier this year, "Long term, we believe the ongoing evolution will drive one of the best growth stories in the media sector."