Belo move is a mixed bag

If I worked for a Belo newspaper this morning, I’d be really nervous about the company’s decision to separate newspapers and television into two companies. My bosses would be telling me that this is a good thing, because we can now focus just on ourselves and our web properties and let those TV people do their own thing. I’d smile like all good troopers smile, but when I was alone with my thoughts, this is the way they would go:

Hmm, newspapers are dying faster than TV stations, so this likely means the company wants to prepare for the inevitable. What about my stock? What about my retirement?

They said something about $750 million in newspaper revenues created by 3,800 employees. Then they said that the TV stations also do $750 million in revenues with 600 less employees. How’s that going to play out in the balance sheet? Won’t investors see those extra employees as a drag? Oh crap. I’m going to lose my job!

Wait a minute. Does splitting up mean they’re going to sell the papers? Who would buy them? Oh God, don’t let it be Murdoch!

Meanwhile, I think I’d also be a little nervous if I worked at a Belo TV station. I mean, there’ll be rejoicing that “we’re finally not going to be dragged down by those dying newspapers,” which will be followed by gasps of recognition that they don’t have newspapers as an excuse anymore. Welcome to the world of shareholder satisfaction, guys.

These are volatile times for any form of mass media, and we shouldn’t be surprised by moves like this. It’s all about satisfying Wall Street, and we’re going to have to watch and see if this “works” for Belo. If so, watch for others to follow suit.

AFTERTHOUGHTS:

  • It occurs to me that Belo is actually selling the newspapers — to the public. Is anybody buying?
  • Part of the deal is that the TV side will get all the debt, $1.2 billion worth. That means the newspaper side has a fighting chance to transition to a web-based business, but it saddles the more profitable side with servicing all that red ink.

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