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Scripps Ponders Splitting Off Assets

Oct 6, 2004  •  Post A Comment

As the E.W. Scripps Co. evolves into an entertainment company, there is nothing barring it from splitting off some of its assets into a separately traded company, CEO Kenneth Lowe said Wednesday.

Speaking at a Goldman Sachs investor conference in New York, Mr. Lowe said Scripps management looks at the value of keeping all of its assets under a single umbrella “quite a bit,” and added, “I would not rule out anything in the future.”

He went on to say that there is nothing requiring Scripps to keep its assets under a single umbrella.

That subject is likely to grab more attention in the future as the Cincinnati-based company’s cable unit, Scripps Networks, accounts for a larger piece of the cash flow generated by the company. While Mr. Lowe did not provide specifics on which assets might be separated from the company, Scripps Networks is a likely candidate.

Scripps Networks includes the cable networks Food Network, Home & Garden Television, DIY — Do It Yourself and Fine Living. It generates around 40 percent of the company’s overall earnings before interest, taxes, depreciation and amortization, in large part due to higher ratings and greater carriage by satellite and cable providers.

When asked how the company’s evolution into a media company might affect its ownership of television stations, Mr. Lowe noted that while Scripps had not acquired a TV station since 1992, had it not been for the cash flow generated by its 10 TV stations, the company would not have gone into the cable business.

“There is no reason [at this time] to exit the TV station business,” said Mr. Lowe, who also admitted his company has “taken it in the chin” in past years at its six ABC-affiliated stations given the weak ratings at the network.

However, he would not rule out leveraging the stations to seize opportunities to increase the company’s cable holdings, or to help other parts of the business.