Milwaukee-based Journal Communications Inc. and Cincinnati-based The E.W. Scripps Company have agreed to merge their broadcast operations and spin off and then merge their newspapers, creating two focused and separately traded public companies.
The merged broadcast and digital media company, based in Cincinnati, will retain The E.W. Scripps Company name, and the Scripps family shareholders will continue to have voting control. The company 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.
The newspaper company will be called Journal Media Group and 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 deal means WTMJ-Channel 4 and radio stations AM-620-WTMJ and FM-94.5-WLWK will become part of the Scripps Company.
The Scripps and Journal Communications boards of directors have approved the stock-for-stock transactions, which are subject to customary regulatory and shareholder approvals.
The deal is expected to close in 2015.
"In one motion, we're creating an industry-leading local television company and a financially flexible newspaper company with the capacity and vision to help lead the evolution of their respective industries," said Rich Boehne, chairman, president and chief executive officer of The E.W. Scripps Company, who will continue at the helm of Scripps. "Making the combinations even more appealing are the rich histories of these two organizations, both driven by a deep commitment to public service through enterprise journalism. For shareholders, this deal should unlock significant value as both companies gain efficiency, scale and more focus on the industry dynamics unique to these businesses."
"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," said Steven Smith, chairman and CEO of Journal Communications. "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. 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."
Journal Communications' Class A and Class B shareholders will receive 0.5176 Scripps Class A Common shares and 0.1950 shares in Journal Media Group for each Journal Communications share. Scripps shareholders will receive 0.2500 shares in Journal Media Group for each Class A Common Share and each Common Voting Share they hold in Scripps.
Journal Communications shareholders will own approximately 31 percent of The E.W. Scripps Company's total shares following the merger. Scripps shareholders will retain approximately 69 percent ownership. The Scripps family will retain its controlling interest in The E.W. Scripps Company through its ownership of Common Voting shares. Scripps shareholders will own 59 percent of the new newspaper company, Journal Media Group, and Journal Communications shareholders will own 41 percent. Journal Media Group will have one class of stock and no controlling shareholder.
Scripps shareholders of record just prior to the closing will receive a $60 million special dividend.
The transaction is expected to be tax-free to shareholders of both companies.