Is the E.W. Scripps Lighthouse Fading?

When I was a writer for E.W. Scripps newspapers in New Mexico and California during the mid-to-late 1990s, the corporate suits would visit us every so often and allow the newsroom staff to ask them questions, sometimes to disastrous effect. (What'd they expect from a room full of journalists?) Direct, though courteous, someone always seemed to inquire after company finances with something like: "What are you guys doing with all the profits we're raking in?"

We were told that some newspaper profits were being used to help pump up Scripps' cable networks -- HGTV, the Food Network, DIY Network, Fine Living, etc... The practice was sold as being good for the company, a way to ensure a stronger and healthier business for all our benefit. We believed. What else were we to do? Investigate our bosses? We had a paper to put out.

In hindsight, we probably should have been a bit more skeptical, considering what the suits did once their cable TV ventures became self-sustaining. Rather than return that goodwill to the newspaper side, Scripps chose instead to split the two divisions into separate companies, a move that was finalized earlier this year.

When it was announced in 2007, USA Today described it as splitting the "stagnant newspaper business into a separate company."

One analyst was quoted as recommending the move as a way to "unencumber" the cable side from newspapers. Funny, that's not how corporate looked at the cable side when it was an encumbrance to the newspaper side.

Scripps Networks Interactive (SNI) began trading as a separate company this summer, with the newspapers holding onto the old SSP designation.

Fast forward to this week. SNI was at $21.13 a share at today's close and SSP was at $1.74, up a few cents after closing yesterday at an all-time low of $1.68.

Why an all-time low? Perhaps it had something to do with the massive sell-off reported by Fitz & Jen over at Editor & Publisher. Apparently the second-largest institutional holder of E.W. Scripps stock -- a 5.13 % stake of 2.135 million shares -- decided to take the money (or, perhaps we should call it spare change) and run.

I assume the largest holder of E.W. Scripps stock is still the Scripps Family Trust, which has been the saving grace of print journalists because it mandates newspaper ownership.

Still, none of this is good news, neither for our friends in Colorado at the Rocky Mountain News (who found out less than two weeks ago that Scripps was putting them up for sale), nor for our colleagues in the suburbs of LA at the Ventura County Star (who were among the victims of the multi-paper cutbacks Scripps instituted last month).

Silly as it seems to even bother asking the question, it'd be interesting to hear someone from Scripps address why anyone should believe the company still has a long-term commitment to newspapering. Based upon its actions in the past year, things sure don't look that way.

— TJ Sullivan in LA