Belo plans to spin off newspaper division

By
USA Today
October 1, 2007, 10:36 PM ET
2 min read

DALLAS -- Newspaper and TV station owner Belo Corp. blc says it will spin off its newspaper division to create separate newspaper and television companies.

The new company, to be called A.H. Belo Corp., will own The Dallas Morning News, The Providence Journal and The Press-Enterprise of Riverside, Calif., and others with a combined readership of more than two million. The company was called A.H. Belo Corp from 1865 until 2001.

The Dallas-based media company says the spinoff will be made through a tax-free distribution of new A.H. Belo shares to Belo Corporation shareholders in early 2008. Belo says it expects to spinoff to be completed in the first quarter of 2008.

Belo owns 20 television stations that it says reach 14% of U.S. television households, including WFAA-TV in Dallas/Fort Worth, KHOU-TV in Houston, KING-TV in Seattle/Tacoma and KTVK-TV in Phoenix.

The newspaper company will also own and manage the websites associated with the properties, along with certain niche products and direct mail and commercial printing businesses, the company says.

The operations to be spun off currently have annual revenue of about $750 million and approximately 3,800 employees.

The newspaper spinoff will leave Belo Corp. with 20 television stations and two regional cable news channels. That company would have about 3,200 employees and revenue of more than $750 million.

Belo's current Chairman and CEO Robert Decherd will become chairman, president and CEO of the newspaper company A.H. Belo, and non-executive chairman of the television company, Belo Corp.

Belo's current President and Chief Operating Officer Dunia Shive will become president and CEO of the television company after the separation.

Both A.H. Belo and Belo Corp. will remain based in Dallas and have two voting classes of common stock after the spinoff.

The newspaper company A.H. Belo Series A shares will have one vote per share, while Series B stock will have 10 votes per share. The television company Belo Corp. Series A and Series B shares already have that structure.

After the spinoff, A.H. Belo plans to pay an annual dividend of about 20 cents a share in quarterly increments, while Belo Corp. plans to pay an annual dividend of approximately 30 cents a share quarterly.

A.H. Belo will be debt-free when the spinoff is complete, Belo Corp. said. The ticker symbol for A.H. Belo has yet to be determined.