Meredith May Split Broadcast, Publishing

Friday, Feb 05, 2016

Meredith Corp. has been one of the biggest exceptions to the trend of media companies divesting publishing properties to focus on their more profitable broadcast TV businesses -- but that may not last.

The women’s interest publisher is considering splitting its broadcasting and publishing units, according to CEO Stephen Lacy, who shared the news in an interview with Bloomberg Television this week.

Lacy said Meredith could proceed with a split in partnership with another media company, rolling up its broadcast TV properties or magazine division with another company while the remainder becomes an independent company.

The news comes just a week after Meredith agreed to terminate a planned merger deal with Media General, allowing the latter to be acquired by Nexstar, following a bidding war.

A number of media companies have completed similar multi-step deals recently.

Back in 2014 E.W. Scripps and Journal Communications completed twin spinoffs and mergers, consolidating their broadcast properties and newspapers in two separate companies.

The list of media companies separating publishing from broadcast TV assets in recent years also includes Tribune Co., which split into Tribune Media and Tribune Publishing, and Gannett Co., which created TEGNA for its broadcast TV properties, while the newspaper continue under Gannett Co.

In 2012, Media General sold its newspapers to Berkshire Hathaway to focus on broadcast TV, and in 2014 Time Warner spun off magazine publisher Time Inc.

Meredith isn’t necessarily committed to a strategic divestment of its print properties, however. Lacy noted the company also has a big war chest for acquisitions in areas including media and advertising technology, telling Bloomberg: “We have a lot of dry powder -- about five deals are in the works. Finding good and creative deals is really where we are focusing our attention.”

As noted above, Meredith may have been planning on a spinoff following the planned Media General merger, which would have created one of the country’s biggest local broadcast TV groups.

However, Meredith found itself effectively outbid by Nexstar, which offered $2.3 billion, including more cash and a bigger share of future broadcast spectrum sales for Media General shareholders. Meredith eventually agreed to break off the merger agreement in return for $60 million in cash; it also retains the right to bid for individual Media General properties.

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