USA TODAY PUBLISHER STEPPING DOWN
Publisher of USA TODAY to step down
Gannett said its board of directors has approved its previously announced plan to spin off the publishing division.
Once the transaction is completed June 29, USA TODAY Publisher Larry Kramer will step down from his role and become a board member of the spun-off company, which will retain the name Gannett.
Gannett, owner of TV stations and 93 daily newspapers and their digital operations, said Monday its board of directors has approved the planned spinoff of the publishing unit, and USA TODAY Publisher Larry Kramer will step down once the transaction is completed.
Kramer, who has headed Gannett’s largest newspaper for about three years, will stay in his current job until June 29, when the new publishing company begins trading as a separate company. He will then become a member of the board of the publishing company, which will be headed by Robert Dickey, now the head of Gannett’s U.S. community publishing division.
“I gave up a lot to come here. It was worth every minute,” Kramer told USA TODAY’s staff in a newsroom meeting Monday.
John Zidich, who was The Arizona Republic publisher until he was promoted to Gannett’s president of domestic publishing in late April, will succeed Kramer as USA TODAY publisher on an interim basis.
The Gannett board’s approval was a formality after the McLean, Va.-based company announced last August its plans to split its operations in an effort to shield its broadcasting and digital businesses from the print advertising decline.
Gannett will retain its broadcasting and digital assets, which include Cars.com, CareerBuilder.com and 46 TV stations that it owns or helps operate, and change its name to TEGNA.
The publishing company, which owns USA TODAY, The Arizona Republic, The Indianapolis
Star, 90 other newspapers and their digital assets, will keep the name Gannett.
As the spinoff unfolds, current Gannett shareholders will keep their shares of Gannett (the company that will become TEGNA) and receive one share of the new Gannett for every two shares of Gannett they own as of June 22.
“We’ve made great strides in revolutionizing our content and delivery methods through our widely successful all-access content subscription model and digital initiatives,” Dickey said in a statement. “We look forward to accelerating this strong progress.”
Gannett said the publishing company “initially will be virtually debt-free” and expects to pay a regular cash dividend of 64 cents per share a year. It’ll also start a $150 million share buyback program to be completed over a three-year period, it said. It also plans to open a revolving line of credit of about $500 million.
TEGNA plans to start a $750 million share buyback program to be completed over a three-year period. At spinoff, TEGNA will retain Gannett’s current debt of about $4.4 billion but have a revolving credit of about $1.3 billion. It expects to pay a regular cash dividend of 56 cents per share a year.
“Combined with new Gannett’s expected dividend, (it) represents a 10% increase over the current Gannett dividend,” the company said in a statement.
“TEGNA has very significant cash flow to invest in its businesses to drive strong revenue growth while returning capital to shareholders,” it said.
John Jeffry Louis, a current Gannett board member and cofounder of Parson Capital Corp., will be chairman of the new Gannett’s board. Current Gannett board Chairwoman Marjorie Magner will serve as chairwoman of TEGNA’s board.