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Newsquest parent company to split into two

The US parent company of regional publisher Newsquest has announced it is to split into two.

Gannett is to create separate companies to cover its digital and broadcasting operations and publishing operations respectively.

Newsquest, which includes 17 daily and more than 200 weekly titles, will be part of the publishing company along with Gannett’s 81 local US daily publications including USA Today.

It will continue to have its headquarters in McLean, Virginia and will be headed in future by Robert J. Dickey, currently president of Gannett’s community publishing division.

Meanwhile Gracia Martore, the current president and chief executive of Gannett, will become CEO of the new broadcasting and digital company, which has yet to be named.

It will include 46 television stations as well as the online motors portal cars.com of which Gannett has now acquired full ownership.

In a statement announcing the move, Gannett said that it expected the Publishing business to be “virtually debt-free” after the separation, with all of Gannett’s existing debt retained by the Broadcasting and Digital company.

It said the separation would give the two newly-created companies a “stronger growth profile” and “enhanced management focus.”

Said Ms Martore:  “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 long-standing traditions of award-winning journalism and service to our local communities.”

“We are creating two companies that will be among the largest and strongest in their peer groups, with increased abilities to focus resources on the most promising areas of their businesses.

“At the same time, we expect to structure this transaction in a way that preserves core advertiser relationships and local marketing capabilities through permissible shared service agreements that will allow both companies to continue to benefit from cross-platform sales and content sharing opportunities.

“We believe separating these businesses will unlock shareholder value both in the near term and increasingly as they develop independently in the future.”

However the National Union of Journalists has asked for further clarification of what the announcement will mean for the UK business.

Chris Morley, NUJ Newsquest group chapel servicing officer, said: “The UK arm has been neglected, starved of investment and hammered over many years by horrendous, compound cuts. Our members left standing in Newsquest deserve a new deal and demand that their professionalism will be rewarded.

“The fact that the newly-created publishing company will be debt-free is to be welcomed and should be the signal for vitally needed investment in journalism. I am concerned however that the US chief executive Gracia Martore is heading off where currently the faster growth is on the TV and digital side.

“We are demanding an immediate statement from Newsquest chief executive Henry Faure Walker as to where this deal leaves our members and the UK business for the future.”

4 comments

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  • August 5, 2014 at 3:02 pm
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    Hmmm…anyone else think this is just designed to make it easier for Newsquest to offload the publishing arm?

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  • August 6, 2014 at 10:17 am
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    So splitting the company and unlocking “shareholder value” will not only feed the fat-cats but also clear the decks for jettisoning all those tiresome newspapers which are so last century.

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  • August 7, 2014 at 11:26 am
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    I struggle to see how a sale of publishing is imminent.
    Digital profits in Newsquest remain a tiny proportion of total profit, and bear in mind these digital “profits” are calculated with no realistic inclusion of the editorial costs which drive people to the website.
    Without the news generating publishing teams, there would no website content, and therefore no audience.

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