BUSINESS

Corporate split means separation of The Arizona Republic, KPNX

Russ Wiles
The Republic | azcentral.com
Employees of the new Gannett line up for lunch at two food trucks in the loading dock of the Arizona Republic, Monday, June 29, 2015. The trucks were brought in to celebrate the first day of the split between TEGNA and Gannett.
  • The corporate split of Gannett from TEGNA means Phoenix broadcaster KPNX is separating from The Arizona Republic and azcentral.com
  • The new Gannett%2C which was spun off Monday%2C owns newspapers and websites including azcentral.com. The company operates in 33 states%2C Guam and the United Kingdom.
  • The Republic%2C azcentral.com and KPNX will continue to be based in the same building in downtown Phoenix.

Two of Arizona's largest news operations set off Monday on different paths as parent Gannett Co., Inc. split into separate corporations.

The Arizona Republic, azcentral.com and other properties of Phoenix-based Republic Media are included in the newly spun off Gannett, with its focus on digital products, websites and newspapers. Phoenix television station KPNX now is part of TEGNA Inc., a company focused largely around 46 TV stations and digital businesses Cars.com and CareerBuilder.com. Both parent corporations are based in McLean, Va.

"The biggest thing for (the Phoenix) market is the changing relationship with KPNX," said Randy Lovely, senior vice president for news and audience development for azcentral.com and The Arizona Republic.

The two Arizona businesses are headquartered in the same building, but on different floors, at 200 E. Van Buren St. in Phoenix and now operate separately. Their operations had converged about four years ago. The split of TEGNA from Gannett recognizes the distinction between faster-growing broadcast entities compared with publishing-focused companies, where print-circulation revenues have declined in recent years.

The new Gannett retains local news websites such as azcentral.com, which Lovely described as "by far the No. 1 source for digital content" in Arizona.

"As we go forward, (Arizona residents and businesses) will see us work to grow and capitalize on the already powerful brand we have in azcentral.com," Lovely said. "While we value our print subscribers, we have worked aggressively for 20 years to grow azcentral.com."

John Zidich, president of domestic publishing for new Gannett, said the company remains committed to delivering award-winning and trusted content in USA Today and in 92 local markets across 33 states and Guam. Zidich, also CEO of Republic Media and publisher of The Republic, will continue to oversee his Phoenix duties until a new publisher is named.

"We look forward to building our new unified culture, an even stronger presence locally, establishing new sources of revenue and continuing to innovate with new products and complete digital immersion in every aspect of our business," he said in a statement to new Gannett's 19,600 employees.

The media parent formerly known as Gannett is now TEGNA, while the publishing entity has taken the Gannett name. The parent company's former chief executive officer, Gracia Martore, has assumed that role with TEGNA.

Robert Dickey, the new CEO of Gannett, has outlined a strategy that could include more acquisitions of local daily newspapers and websites. For example, in June, Gannett purchased the remaining 59 percent stake in a Texas-New Mexico newspaper group that it didn't own.

The new Gannett has virtually no debt and substantial free cash flow, which totaled $274 million in 2014. On a pro-rata basis, the new Gannett generated net income of $33 million last year on revenue of nearly $3.2 billion. The company earns about 47 percent of its revenue from print advertising, 35 percent from circulation, 11 percent from digital advertising and the rest from other sources.

In addition to usatoday.com, USA Today, azcentral.com and The Arizona Republic, Gannett's other large businesses include freep.com and the Detroit Free Press; cincinnati.com and the Cincinnati Enquirer; and indystar.com and the Indianapolis Star. The company also has publishing and digital operations in the United Kingdom, mostly in Scotland, southwest England and the Midlands region.

The new Gannett retains the former company's stock symbol of GCI. TEGNA's symbol is TGNA. The decision to split the corporation was announced in August 2014.

Reach the reporter at russ.wiles@arizonarepublic.com or 602-444-8616.