The splintering of print and television companies in the media industry continued unabated on Tuesday when theGannett Company announced that it would spin off its newspaper division, which includes USA Today, into a separate company next year.
It was the latest in a series of reorganizations at media companies that highlight the widening profit gap between television stations and other properties and the newspapers that drag on their performance. In a conference call to discuss the spinoff, analysts peppered Gannett’s top executives with questions about its far more lucrative television division and digital assets like CareerBuilder and the newly acquired Cars.com; the future of the company’s 81 newspapers, once a cornerstone of the business, almost seemed like an afterthought.
The planned separation comes after similar moves by News Corporation, Time Warner and Tribune Company, all of which determined that their entertainment and broadcast properties could perform better, and remain more attractive to Wall Street, without the burden of propping up the print division.
The deal left many media industry experts and analysts asking how Gannett’s print company planned to grow and generate profits. “It makes it a more risky portfolio because they don’t have a digital segment to fall back on or TV stations to fall back on,” said Craig Huber, an independent research analyst at Huber Research Partners. “They are probably going to feel more pressure as a stand-alone newspaper company.”