According to Pew Research, an analysis of the spinoffs shows that the broadcasting components of the original companies (which also retained many digital properties) have mostly outperformed their publishing counterparts in terms of operating profit margins and stock prices.
In 2014, before spinning off its publishing properties, Gannett had an operating profit margin of 39%. Following the 2015 spinoff, Gannett’s broadcasting arm, Tegna, had a similar operating profit margin of 37% – nearly three times that of its publishing sibling (13%), which retained the “Gannett Company” name. (Operating profit, often referred to as “operating income before depreciation and amortization,” represents the portion of every dollar in sales that accrues as profits, before paying taxes and investors, and excluding figures that fall outside the company’s typical operations.)
The differences were even larger for Tribune, which had an operating profit margin of 35% in 2013, before its spinoff. After the spinoff, in 2014, their broadcasting company (Tribune Media Company) had a similar margin of 31%, which was more than four times that of its publishing sibling, Tribune Publishing (recently renamed tronc).
The E.W. Scripps Co. story is a bit more complex, in part because the broadcast successor’s merger-related costs were four times those of the publishing successor. In 2014, the company owned 14 daily newspapers and 21 television stations and had an operating profit margin of 13%. The following year, it merged with Journal Communications, which owned the Milwaukee Journal Sentinel and 14 television stations, and spun the resulting 15 daily newspapers off as Journal Media Group. In 2015, Journal Media Group had a profit margin (7%) that was lower than that of E.W. Scripps Co. before the spinoff, but higher than that of its post-spinoff broadcasting successor (4%). (In 2016, Journal Media Group was acquired by Gannett.)
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