My sources confirm this report from a Milwaukee tipster: The Journal/Scripps story broke earlier than planned on the Milwaukee Journal Sentinel’s website because the Wall Street Journal got wind of the deal. The news was scheduled to break Thursday morning in the Journal Sentinel, but after the paper learned the WSJ had the story, JS reporter Bill Glauber was sent to the 5th and 6th floor – away from the newsroom – to do the reporting late Wednesday.
Bruce Murphy, a former Journal Sentinel reporter, writes at Urban Milwaukee: “This is a basically a buyout. Yes, it’s called a merger, but Scripps has the whip hand. …As for JS editor Marty Kaiser, the guy’s a survivor who has lasted through many changes at the paper. I wouldn’t be surprised if he survives, but he’ll definitely be dancing to a different tune.”
Here’s the memo that Journal Communications employees got this morning from president and COO Andre Fernandez:
Good morning, everyone,
I’d like to build upon Steve’s message yesterday and address further what the announcement means for our teams.
As a publicly-traded company in a rapidly-changing media industry, we have long considered how to both grow our business and to enhance shareholder value. Over the past decade, we have evolved and simplified our business from that of a broadly diversified media company to, today, a more concentrated focus on TV, radio, newspaper publishing and digital. However, our industry has moved just as rapidly. In just the past three years, we’ve seen unprecedented consolidation in the broadcast television industry, with most broadcast media competitors, both large and small, eager to gain scale and the benefits derived therein./CONTINUES
While we have participated in this consolidation to an extent, primarily via our recent TV acquisition in Nashville, we are still small when compared to other publicly traded media companies. We’ve also seen media companies become narrower over the past decade in their operational and strategic focus, with new pure-play newspaper (think AH Belo, Tribune Publishing, BH Media Group) and broadcasting (Media General, Tribune Broadcasting) entities having been created, along with recent mergers among already-sizeable companies (ie. Gannett-Belo, Media General-LIN). In this environment, the need for scale has arguably never been more important.
It’s important to note that, among companies we could have chosen to partner with, Scripps is an outstanding fit. We have found in them a long and proud history of ownership not dissimilar from Journal’s, similar business lines in their publishing and television assets, a thoughtful and conservative approach to doing business yet above all, an outstanding cultural fit with comparable values. Like Journal, the Scripps team believes in the critical role our stations play in their local communities. They treat their employees with the utmost respect and provide them with opportunities to develop. Most importantly, they make significant investments in their operations and people, and they give their local markets the tools – but also a level of autonomy – with which to flourish.
At the conclusion of the transaction, our television employees will now be part of an industry leader – the fifth largest independent television group in the country – with presence in a number of large markets and political swing states. We’ll also be part of one of the largest ABC affiliate groups in the country. Between Scripps and Journal, the amount of television expertise is truly laudable, and will play a key role in helping the larger, combined Scripps television operations innovate and compete.
As for our radio employees, Scripps is excited to re-enter the radio business. The company had radio operations before the expansive radio industry consolidation in the mid-1990s, and before their focus on cable TV Now Scripps is looking forward to getting back into the business, with Journal Broadcast Group’s strong clusters leading the way.
Finally, for our publishing employees, the new Journal Media Group will be an industry leader in publishing. The new publicly-traded company will have the size, scale and expertise to compete, along with an excellent balance sheet and improved financial flexibility. And perhaps just as importantly, Milwaukee will remain the home of publishing and provide even greater professional opportunities to our teams.
Though we look forward to the opportunities this transaction will bring, we don’t yet know the final organizational structure of the larger EW Scripps broadcast company or the new Journal Media Group publishing company. As you heard this morning, Tim Stautberg, currently SVP of Newspapers for Scripps, will be the CEO of the new Publishing company, with Steve Smith serving as Chairman of the Board. Rich Boehne will remain the Chairman and CEO of the E.W. Scripps broadcast company. Other Journal leaders are expected to hold senior positions in the new companies. As soon as these plans are announced, we will communicate them to you. Thank you in advance for your patience and support as we build the leadership teams of the two companies.
What led us to yesterday’s announcement was the success of our operations, the value we bring to our local markets, and our strong cultural heritage As we aim for a 2015 closing date, please continue to serve your local markets and your colleagues. Continue to be your community’s best source of information and entertainment. And let’s look forward with optimism to the opportunities this transaction will create for our employees and our business.
* How the Journal/Scripps deal could hurt the Journal Sentinel (urbanmilwaukee.com)
* Journal Sentinel says analysts like the deal (jsonline.com)
* Scripps, Journal Communications to divvy up print, broadcast assets (wsj.com)