Journal Communications releases full year 2014 earnings report
Broadcast properties, slated to go to Scripps, report growth, publishing side sees revenue decline
The publisher of the Milwaukee Journal Sentinel, Journal Communications, reported its fourth quarter and full year earnings. Q4 broadcast revenue increased 32.9% to $60.0 million, while publishing revenue fell 4.3 percent to $40.0 million.
Journal Communications is merging its broadcast properties with that of E.W. Scripps, with Scripps now becoming an exclusively broadcast company, while Scripps is sending over it print to Journal Communications, creating a new publishing company to be called Journal Media Group.
As with other spin offs, with the notable exception of News Corp, the new publishing side will begin life with huge disadvantages. In this case, the fact that both the Journal Communications and Scripps earnings reports show declining revenue for the two sides of the business being put together, and growing revenue for the broadcast side.
Another issue that will be faced by the new publishing company is debt and pension obligations. Today’s earnings report contained this note:
We were not required to make a contribution in 2014 to our qualified defined benefit pension plan. The underfunded status of the qualified defined benefit pension plan increased by $29.7 million in the year ended December 31, 2014 to $72.6 million at December 31, 2014 due primarily to: (1) an unfavorable effect of $16.8 million from a decrease in discount rates; (2) an unfavorable effect of $13.0 million from an increase in life expectancies, resulting in an increase in the benefit obligations; (3) interest cost of $7.1 million; and (4) other actuarial adjustments of $0.5 million; partially offset by (5) a favorable effect of $7.7 million from actual returns on plan assets.