USA Today owner Gannett said on Tuesday it would spin off its print operations, including USA Today, becoming the latest media company to separate slower-growing publishing assets from TV and digital properties, according to The Associated Press.
In a widely expected move, Gannett joined the ranks of News Corp Time Warner and Tribune Media, which have all jettisoned print businesses as newspapers and magazines face unprecedented challenges with declines in advertising revenue and readership, the AP reported.
The print group which includes 81 local newspapers in the United States and the British newspaper arm Newsquest, will retain the Gannett name and split from its 46 TV stations and digital properties including classified listing sites Cars.com and CareerBuilder in a yet to be named company, according to the AP.
"We decided this was the right moment in time to do this," Gracia Martore, chief executive of Gannett, said in an interview, the AP reported. "We are separating into two strong (companies) with the ability for each of them to pursue growth opportunities."
Several times during a conference call with analysts Martore stressed that the newspaper company will be "virtually debt free," a move that takes a page from Rupert Murdoch's playbook, according to the AP.
Murdoch made sure to fortify News Corp, which is now home to his publishing assets, with no debt and about $2.5 billion in cash when he split it from the entertainment and cable properties now known as Twenty-First Century Fox, the AP reported.
Tribune and Time Warner saddled their publishing arms with debt when they spun out their newspapers and magazines into separate companies, according to the AP.
Martore said that freed from cross-ownership restraints, meaning the current company cannot own a TV station and newspaper in the same market, Gannett's newspaper group could go on an acquisition spree, the AP reported.
