Journal makes newspaper, broadcast deal with E.W. Scripps Company
In a lot of ways, Wednesday's announcement marked an end of an era.
For years, Journal Communications held a solid foothold on media in Milwaukee and expanded its footprint beyond with radio and television broadcasting properties.
Journal Communications will become Journal Media Group and operate print and digital operations for 14 markets with the headquarters in Milwaukee.
WTMJ-TV Ch. 4, WTMJ-AM 620 and WLWK-FM 94.5 will merge into E.W. Scripps Company based in Cincinnati. Scripps will end up serving 27 markets with television and radio stations.
"This transaction will create two solid media businesses that will continue to serve their communities with a commitment to integrity and excellence that has been built over many years," Steven J. Smith, chairman and CEO of Journal Communications, said in a press release.
"Journal's radio and television stations will add depth and breadth to the Scripps TV group and additional expertise to its management team. The formation of the new Journal Media Group, headquartered in Milwaukee, will continue a tradition of exceptional print and digital journalism in 14 markets across the country."
Since both Journal and Scripps are publicly traded, current shareholders will have ownership in the two companies. Scripps shareholders will have 69 percent of the merged broadcast company and 59 percent of the newly formed Journal Media Group. Journal shareholders will have 31 percent of the broadcast company and 41 percent of the Journal Media Group.
Steve Wexler, the former GM of WTMJ-TV and the two Milwaukee radio stations that made up the local contingent of the Journal Broadcast Group, said he was taking on a new role with the radio group in the merged E.W. Scripps broadcast company.
"I'm looking forward to joining the Scripps team and continuing our work in radio, creating differentiated local content for listeners and creative solutions for advertisers. As I've become familiar with their people and their culture, I'm confident that my team and I will feel right at home as we plan our future together," Wexler said Wednesday evening.
At this point it is hard to say what all the changes mean for the people at the local newspaper, television station and radio stations. The deal is still up for shareholder approval and probably won't close out until 2015.
Scripps will have approximately 4,000 employees across its television, radio and digital media operations and is expected to have annual revenue of more than $800 million, according to the release. Journal Media Group will combine Scripps' daily newspapers, community publications and related digital products in 13 markets with Journal Communications' Milwaukee Journal Sentinel, Wisconsin community publications and affiliated digital products. The company, with expected annual revenue of more than $500 million and approximately 3,600 employees, will be headquartered in Milwaukee.
The worry-some part of the report is this line: "The companies project about $35 million in combined transaction synergies in the near term."
That could mean some consolidation in business divisions and getting rid of procedure overlaps. But, this also tends to be lingo to get around saying that there will be jobs lost as part of the merger.
We've talked about this for years, the death of newspapers and print. While I never fully agreed with those sentiments, I do agree that the businesses in the media print world will be smaller than they once were. If the business leaders figure out they are in the information business and not the print business, they may have a chance to evolve and change into something else.
As a watcher of the media business, I'm not confident in the role that print will play with the next generation that knows how to operate tablets better than most adults.
With broadcast seemingly out of the way for the new Journal Media Group, they may be better prepared to deal with the transition. As a former print writer and editor, I'm cheering for the business's survival. But I'm uncertain how it will pan out.
For the Journal's Smith, he has a different view on the long-range plan. He will become the non-executive chairman of the board.
"These companies will offer a combination of excellent local media assets and an incredible array of talent in our employees. We look to the future with great optimism and a continued sense of purpose in providing relevant, differentiated content to our local communities across the country," Smith said.
The merger here will mean Scripps is back in the radio business, after being out of it for years.
"Our radio team is energetic, creative, and successful," Wexler said.
"We've worked hard to embody Journal's core values, and I'm so pleased that we'll be joining forces with a company that shares our strong beliefs in excellence and service. In the time I've spent with the Scripps team, it's clear that we both have high standards and expectations, and our radio team is looking forward to this new chapter in our collective histories."
The big benefit for the Journal is the overall bottom line. When the deal closes, Journal Media Group will have $10 million in cash and nothing else. Scripps will pick up all the debt and pension obligations that Journal Communications once held.
In case you were wondering, Scripps will hold onto the Scripps National Spelling Bee.
Jeff | July 31, 2014 at 9:07 a.m. (report)
Scripps' 59 percent ownership of Jounral Media means that Scripps will call the shots, no matter where the headquarters is located. Milwaukee keeps the struggling print division, Cincinnati gets the profitable broadcast division. We're definitely getting the short end of the stick in this deal. On the plus side, maybe Scripps will retire those ugly, ugly graphics on Channel 4.
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