Journal Communications Inc. of Milwaukee and E.W. Scripps Co. of Cincinnati have an agreement to merge broadcasting operations while spinning off newspaper holdings into a separate public entity, the companies announced late Wednesday.
Scripps is the parent company WRTV Channel 6, the ABC-TV affiliate in Indianapolis, and the Evansville Courier & Press.
Earlier this year, Scripps said it was building a multimillion-dollar master control facility at its WRTV-TV that will control all 19 of Scripps’ U.S. television stations.
The newspaper component of the deal, Journal Media Group, will be headquartered in Milwaukee and operate in 14 markets, according to news releases from the companies. It will combine Journal Communications' Milwaukee Journal Sentinel, community publications and digital products with Scripps' daily newspapers, including the Memphis Commercial Appeal, plus community and digital products.
Meanwhile, Journal Communications' broadcast assets will be folded into Scripps, with headquarters remaining in Cincinnati. The company will own and operate TV and radio stations serving 27 markets, making it the fifth-largest independent TV group in the country, according to the releases.
"On both sides of this transaction we feel there is great value, great logic and a great cultural fit," Steven J. Smith, chairman and CEO of Journal Communications, told the Milwaukee Journal Sentinel. Smith will serve as the non-executive chairman of Journal Media.
Tim Stautberg, senior vice president of newspapers for Scripps, will become president, CEO and a director of Journal Media. Richard A. Boehne will remain as board chairman, president and CEO of Scripps, the releases said.
The companies say both boards of directors have approved the deal, which is expected to close in 2015. Shareholders and regulators must also approve it.
Scripps shareholders will own 69 percent of the combined broadcasting company and 59 percent of Journal Media Group. Journal Communications shareholders will own 31 percent of the broadcasting company and 41 percent of the newspaper group. Scripps shareholders will also receive a $60 million cash dividend.
The Scripps National Spelling Bee will remain under Scripps' stewardship, according to the releases.
There have been consolidation and spinoffs in both the television industry and in publishing. Rupert Murdoch separated his entertainment business, now 21st Century Fox Inc., last year while retaining the publishing assets such as the Wall Street Journal at News Corp. Tribune Co. also is cleaving its television operation from print.
Sinclair Broadcast Group Inc. and Gannett Co. have led a round of television-station buyouts. Sinclair, based in Hunt Valley, Maryland, is acquiring TV stations owned by the Allbritton family for $985 million, while Gannett bought Belo Corp., another TV station group, for $2.03 billion in December.
Lucas said consolidation in the TV business is likely to continue.
Wells Fargo served as financial adviser to Scripps, while Evercore Partners advised the Scripps family, according to the statement. Methuselah Advisors gave advice to Journal Communications.