Posted by: Jon Fine on January 10, 2007
Maybe. Or maybe not. Time will tell if the news that Scripps is mulling the notion of doing … well, something with its newspaper properties ends up amounting to something more than mere mulling.
1. At this point, nothing concrete is in hand—no investment bank has been retained to, um, “explore strategic options” or anything like that.
2. Tribune and McClatchy can tell you a thing or two about how much newspaper assets are worth right now. Would a company like Scripps sell key assets when their market values are completely tanking?
3. As a (very) rough transcript (scroll down here) of a Scripps executive’s remarks testifies, a Scripps family trust mandates ownership of a newspaper company. There are, of course, ways to finesses this. Scripps could sell all but a select few newspapers. Scripps could spin-off a newspaper division. (And, boy, would that be a hot stock [severe coughing].)
4. Bear in mind all this is happening while Scripps’ stock has done pretty well. Done well for a newspaper company that is—in the past year it’s essentially held steady, while underperforming market indices. It would do better if it had no newspapers, as the analysts point out
5. I am tempted to ask: does selling big assets for historically low valuations get you enough of a bang in the stock price—enough so that the whole deal makes sense?
But perhaps I’m just hideously sentimental about newspapers, despite all the terrible things I’ve said about them.