Gannett Co., Inc. (GCI) has decided to split its business into two separate entities, one completely focusing on Broadcasting and Digital businesses and the other concentrating on Publishing. The bold step is similar to that of the Tribune Company that spun off its newspaper business into a publicly traded company Tribune Publishing Company (TPUB). News Corporation (NWSA) and Time Warner Inc. (TWX) have also separated their broadcasting and digital properties from their sluggish print business.
Gannett had earlier informed that following the split, the two companies will remain headquartered in McLean, VA. While the Publishing business will be christened Gannett, the name of the Broadcasting and Digital company is yet to be decided. Gracia Martore will spearhead the Broadcasting and Digital company, while Robert J. Dickey will serve as CEO of the Publishing division.
For quite some time now, Gannett has been making endeavors to expand its presence in broadcasting and digital products with a view to lower its dependency on its soft print media business and traditional advertising. This would reduce its susceptibility to economic conditions to a great extent.
The news of Gannett taking over Cars.com underscores the same. Prior to this, the company bought six television stations of London Broadcasting Company and acquired television-station operator, Belo Corp. We believe this will transform Gannett’s business model, which was largely focused on low margin newspapers to a high-margin multi-media business.
Apart from business model diversification initiatives to add revenue streams and counter any economic onslaught, Gannett is adapting to the evolving multi-platform media universe, which currently includes Internet, mobile, social media networks and outdoor video advertising. The company is also realigning its cost structure and streamlining operations to increase efficiencies.
Gannett also initiated a subscription-based model and commenced Digital Marketing Services in top markets to generate new advertising and marketing revenues sources. Other publishing companies are also trying to include different revenues generating ways.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment