Belo To Spin Off Slumping Newspapers From TV

By: Mark Fitzgerald Belo Corp. said Monday it will spin off the Dallas Morning News and the rest of its $750 million newspaper operations from its television divisions - fueling speculation it may leave newspapers altogether.

Belo said the newspaper business would be spun off into a publicly traded company called A.H. Belo Corporation -- taking a name from its founding newspaper publisher that it abandoned more than a decade ago to emphasize its broadcast and multimedia businesses.

Newspapers and broadcast have been moving in opposite directions at Belo in recent years. In its Q2 financial report in August, Belo reported its newspaper revenues had slumped 8.5% on slumping real estate, retail display, help-wanted and auto classified.

By contrast, its 20 station television grow up was up 2.5% even as political ads, for instance, fell by more than half. Even the growth in Web sites associated with Belo TV stations outstripped Internet growth at newspaper sites, by 48% against 19%.

Belo's Monday announcement did little to disguise which direction it thinks will be more lucrative. The television business was described as "20 television stations in fast-growing markets."

Belo also noted that the new TV business -- which will keep the Belo name -- will the largest pure-play publicly traded television broadcast company in the United States with after-split revenues of $750 million, the same as the new newspaper business, and about 3,200 employees, about 600 fewer than work at newspapers.

The spin-off will accomplished through a tax-free distribution of A.H. Belo Corp. shares to Belo Corp. shareholders. It is expected to close in the first quarter of 2008.

The new A.H. Belo will continue to be headquartered in Dallas, and is expected to be listed on the New York Stock Exchange.

In addition to the Morning News, the ninth largest daily in the nation and 12th largest Sunday paper, A. H. Belo will own and operate The Providence (R.I.) Journal; and The Press-Enterprise in Riverside, Calif.

Belo Chairman and CEO Robert W. Decherd will become chairman, president and CEO of A. H. Belo, and non-executive chairman of Belo Corp.

A. H. Belo will be debt-free upon completion of the spin-off, Belo said.