Belo spinning off newspapers

Really not sure what all this means. Someone smarter than me can analyze it.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiwVhvFzBFzo&refer=home

 

Basically they're concentrating on the TV business and selling out to Wall Street.

 

Smart move that will soon be followed by others such as Tribune.

 

smarter. He said smarter.

 

Smart for who?

My guess is this ends one of two ways:
1 (the good option): A small newspaper group, freed from the debt payments on TV stations, has the positive cash flow it needs to invest, innovate and otherwise figure a way out of our industrywide tailspin. Jobs remain, maybe even grow. Dallas, Providence and Riverside retain their quality newspapers.

2: (the bad option): This is step one in a bid to flip the three papers, which as a company aren't really big enough to be super-efficient and, while profitable, won't see the kind of growth investors want. They'll get sold and hacked, or hacked and sold. Or hacked, sold and then hacked some more. Either way, it sucks for all, except Wall Street.

I'd put the odds at 70-30 on Option 2. But then, I'm a cynic.

 

No question from me there. I believe option 2 is going to be their move in the long run but like it or not, it does help generate some capital.

 

Splitting up the Dallas combo with the TV station does not bode well for the DMN.