July 30 Journal Communications Inc. and E.W. Scripps agreed to merge broadcast operations and spin off their newspaper businesses into a new publicly traded entity, the media companies said late on Wednesday.
The deal, expected to close in 2015, would usher in short-term savings of some $35 million, the companies said in a joint statement.
The newly formed newspaper entity would combine Scripps' newspapers in 13 markets with Journal Communications' flagship Milwaukee Journal Sentinel.
The E.W. Scripps broadcast media company, controlled by its namesake founding family, would operate television and radio stations in 27 markets, making it the nation's fifth-largest independent television group.
Journal Communications' Class A and Class B shareholders will receive 0.5176 Scripps Class A common shares for each share they hold and also receive 0.195 shares in Journal Media Group, the newly formed Milwaukee newspaper entity, for each share.
Shareholders in Cincinnati-based Scripps will receive 0.25 shares in Journal Media Group for each Class A Common Share and each Common Voting Share they hold in Scripps, and a $60 million special dividend.
Scripps investors will own 69 percent of the combined broadcasting company and 59 percent of the Journal Media Group.
Rich Boehne, chairman, president and CEO of The E.W. Scripps Co, will continue to run Scripps. Tim Stautberg, senior vice president, newspapers for Scripps, will become president, CEO and a director of Journal Media Group.
The publishing and television industries have seen similar moves, such as News Corp's decision to split its publishing business and entertainment operations, and Tribune Co's separation of its newspapers from more lucrative broadcast TV stations and digital properties.
The Scripps National Spelling Bee will remain under the control of the The E.W. Scripps Co.
Journal Communications shares closed on Wednesday at $8.76, up 2.6 percent. E.W. Scripps dropped 0.49 percent to $19.99. (Reporting by Eric M. Johnson; Editing by Ken Wills)