Gannett to splitting publishing, broadcast operations

Gannett today announced that it will split up its publishing and broadcast business, following a move made by a number of other media companies in recent years, including Tribune, which just completed the spinoff of Tribune Publishing yesterday.

The move — slated for completion by the middle of next year — will allow the independent operation of Gannett’s 81 daily U.S. newspapers and its broadcast interests, which grew significantly with last year’s $2.2 billion acquisition of Belo Corp.

Gannett said its publishing division will be essentially debt free when the spinoff is completed, and that its broadcast and digital division would hold any existing debt. Gannett shares jumped to levels not seen in more than five years — more than 9 percent — upon release of the news.

Gannett also announced that it will acquire Cars.com for $1.8 billion, a move that will strengthen its broadcast and digital operation, which currently operates more than 40 televisions stations and websites including CareerBuilder.com.

The Cars.com deal gives Gannett ownership of the 73 percent of Cars.com owner Classified Ventures that it didn’t already own. The newly named Tribune Media Co. was among the remaining Classified Ventures’ partners that agreed to sell its stake to Gannett.

Gannett’s publishing division will encompass flagship USA Today, as well as Gannett’s 81 dailies and U.K.-based regional community news provider Newsquest.

The publishing business will retain the Gannett name and the broadcast/digital operation will be renamed in the future.

Robert J. Dickey, president of Gannett’s U.S. Community Publishing unit, will be CEO of the publishing company, while Gannett President and CEO Gracia Martore will become CEO of the broadcasting and digital company.

“These transformative transactions will give both the publishing company and the broadcasting and digital company enhanced strategic, operating, financial and regulatory flexibility to pursue growth and consolidation opportunities in their respective markets, while delivering strong cash flow to build further upon Gannett’s longstanding traditions of award-winning journalism and service to our local communities,” Martore said in a statement.