In addition to media properties throughout the United States, Belo owns The Dallas Morning News, which is the ninth largest daily in America, WFAA-TV, Texas Cable News, Al Dia and Denton Record-Chronicle in the Dallas area, KHOU-TV in Houston, KENS-TV and KCWX-TV in San Antonio and KVUE-TV in Austin.
Like other integrated media companies, the financial underperformance of Belo''s newspapers has been an ongoing concern and undoubtedly is the driving force in today''s announcement. In its Q2 financial report in August, Belo reported its newspaper revenues had slumped 8.5 percent on slumping real estate, retail display, help-wanted and auto classified. By contrast, its 20 station television group was up 2.5 percent even as political ads, for instance, fell by more than half. Even the growth in Web sites associated with Belo TV stations outstripped Internet growth at newspaper sites, by 48 percent against 19 percent.
Other major American dailies have similarly seen changes in ownership and operations -- most notably the Wall Street Journal and the Tribune Company -- in an effort to shore up finances and improve the financial outlook of broadcast properties.
The concern in the public relations community is that The Dallas Morning News will be left to flounder and, ultimately, could be sold. As we''ve seen with the Tribune and Wall Street Journal, there is no shortage of extremely rich people who just love the ego stroke of owning major newspapers, so it''s certainly within reason to suspect that this is the first step in putting the company''s newspapers on the market.
The new venture, which will be called A. H. Belo Corp., will own and operate The Dallas Morning News, as well as The Providence Journal and The Press-Enterprise in Riverside, Calif.
The spin-off will happen through a tax-free distribution of A H. Belo shares to Belo Corp. shareholders, according to the Dallas-based media company. The company said it expects the spinoff to be completed by the first quarter of 2008. A. H. Belo''s combined newspaper and related online businesses currently have annual revenues of approximately $750 million and about 3,800 employees.
Once the spinoff is complete, Belo Corp. will own and operate 20 television stations and their associated Web sites. Belo also will own two 24-hour regional cable news channels, the company said.
Robert W. Decherd, current chairman and Chief Executive Officer of Belo Corp., will become chairman, president and Chief Executive Officer of A.H. Belo, and non- executive chairman of Belo Corp., while Dunia A. Shive, current president and Chief Operating Officer of Belo Corp., will become president and Chief Executive Officer of Belo Corp, according to a company news release. A.H. Belo will be debt-free upon completion of the spinoff, the company said.