Scripps Finds Breaking Up Is Easy to Do in Cable

Synergy is sooo passe, so 1999. It seems investors can get confused by the sum of a company's parts, so media moguls have been taking a strategy of divide and conquer.

There was the Viacom (VIA) - CBS (CBS) split, IAC (IACI) is looking to split into five companies, and Time Warner (TWX) is fully splitting off its cable division. Speaking of cable, Discovery (DISCA) is relaunching its stock to make it easier to invest in its growing cable programming business.

Now E.W. Scripps (SSP) is taking a similar strategy. The SEC just approved the plan to split the company's fast and slow growing divisions. It's a common strategy in this media landscape where old media seems slow and archaic compared to dynamic web-fueled growth.

One company, Scripps Networks Interactive will include its cable networks: Food Network, HGTV, DIY Network, plus online comparison shopping sites Shopzilla and USwitch. With the Food Network churning out stars and attracting unprecedented viewers, there's no question that cable programming is hot. The company expects this division to see a revenue increase in the high single digits compared to last year.

The other E.W.Scripps (it'll continue to trade under the current SSP symbol) will have 10 broadcast TV stations and newspapers in 15 US markets. Needless to say, this division relies much more on the volatile and depressed advertising market. And local newspapers haven't yet found a new strategy as they struggle to reinvent themselves. The company forecasts that this division will see revenues fall 8 to 10 percent year-over-year (ouch) even as TV revenues rise 16 to 18 percent thanks to presidential campaign ads.

Scripps announced this plan in October, and Friday the stock was trading up slightly on this news.