E.W. Scripps Co. (NYSE: SSP) today announced its intention to ralston the company. (Ralstoning, by the way, is a term I just coined, referring to the climber Aron Ralston who, trapped by a boulder, was forced to cut off his own arm to survive.) The move separates the still-beating heart of Scripps, its cable-TV and internet shopping sites, from the dead meat, newspapers and local television.The move follows a similar Ralston by Belo Corp. (NYSE: BLC), which recently split its dead tree and television businesses to the satisfaction of its stockholders and a spike in its stock price.
The new Scripps Networks Interactive will include the Food Network, DIY and HGTV, while E. W. Scripps will hold papers including the Rocky Mountain News as well as 10 local TV networks.
Scripps stockholders will receive shares of the new company as dividends, but the operations of both entities will remain in the control of the Edward W. Scripps Trust.
The move by Scripps and Belo could also present opportunities for investors that believe that the newspaper business, while in decline, could still have some value to be wrung out of it. Once cut free from the cable TV business, its stock could quickly fall to an undervalued level.
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