By Peter Sterne
On a hastily announced investor conference call Gannett C.E.O. Gracia Martore added some detail to the company’s plan, to spin off its newspaper division. The spin-off will create two publicly traded companies—one dedicated to the high-margin broadcast and digital businesses, and one dedicated to newspaper publishing. It was also reported last night that Gannett would pay $1.8 billion to acquire full ownership of the website cars.com, which it currently owns a 27 percent stake in. After the spin-off, which Martore said should be completed in mid-2015, the publishing company, which is keeping the Gannett name, will become the largest standalone newspaper publishing company in the United States. It will also be “virtually debt-free,” she said. Martore said that she will serve as C.E.O. of the yet-to-be-named broadcasting and digital company, which will retain Gannett’s debt of $4.6 billion of debt, including the cost of the cars.com acquisition. One aim of the split, Martore said, is to make it easier for both the publishing and broadcasting companies to make acquisitions, without being hampered by the F.C.C. regulations that prohibit the same company from owning television stations and newspapers in certain markets. “It has been difficult for us to, in some cases, be able to look at certain acquisition opportunities that we thought were very attractive because of the cross-ownership rules and other issues,” The newspaper company, she added, will be in a strong position to make acquisitions since it will have no debt and impressive cash flow for a newspaper company. Gannett’s paywall, introduced in 2012, added more than $100 million of operating income, she said. Gannett owns the Great Falls Tribune.
