By: E&P Staff
Newspaper revenues will fall 8% to 10% in the second half of the year as The E.W. Scripps Co. splits its print and local broadcast from its TV network and online businesses, the Cincinnati-based media company forecasts.
Scripps said the revenue fall-off is expected because of industry-wide weakness in local retail and classified advertising revenue — aggravated by its ownership of papers in California and Florida.
Scripps said it expects its newspaper expenses to be flat for the second half, compared to the year-ago period.
Scripps is separating into two publicly traded companies July 1. It said revenue for the new Scripps Networks Interactive Inc. will increase in the upper end of its previous full-year guidance of 8% to 10% compared to 2007.
When the separation is complete, The E. W. Scripps Company will continue to operate newspapers in 15 markets; 10 broadcast television stations that are concentrated in top 50 U.S. markets; and United Media, the licensing and syndication business that handles the Peanuts and Dilbert comic strips, and 150 other creative properties.
Scripps said the syndication business is expected to generate about $6 million in segment profit during the second half of 2008.
When the company splits on July 1, the E.W. Scripps should have about $50 million in net debt, and will carry on its balance sheet $1 billion in goodwill, of which $800 million is allocated to newspapers. It noted it may test for goodwill impairment before its annual test during the fourth quarter.
E.W. Scripps expects to pay a dividend of 6.5 cents per share.