What Wall Street Journal, Murdoch papers can learn from Scripps, Belo splits

SNL Financial
Two American newspaper companies are four years into the split that Rupert Murdoch envisions for News Corp., and the results are not especially encouraging. That’s the finding of analyst Sarah Barry James of SNL Kagan in a note published this morning.

A.H. Belo (newspapers) and Belo (local television) have both had significant loss of market capitalization since the 2007 split. James notes that the division of the companies came just as the worst of the recession was starting, explaining at least some of the decline.

E.W. Scripps (newspapers and local television) and Scripps Networks (cable channels like the Food Network) have done better. The Scripps Networks have grown in market value and E.W. Scripps has held about even – so a shareholder who stayed in both would now be money ahead. Scripps differs from Belo in that it kept the relatively prosperous local TV business part of the newspaper company.

News Corp. is much-larger, an international company and its Dow Jones division has a number of specialized financial information products not subject to the same negative trends as newspapers. Still some skeptics foresee a repeat of these scenarios – benefit to the fast-growing cable businesses but a tough slog for the newspaper company.

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