The nuts and bolts of the Belo spin-off


If you currently hold shares of Belo Corporation, there’s not anything you have to do related to the planned spin-off of the company’s newspaper business. Current shareholders will still have their Belo shares and they will be receiving shares of the new A.H. Belo Corporation, whose stock trading symbol has yet to be determined. The company says the stock distribution ratio and record date will be determined and communicated in late 2007 or early 2008. As with the current company, the Class A shares, with one vote each, will be publicly traded, while the Class B shares, with 10 votes each, will not. Thus, the founding family will retain voting control of both companies. Plans are for the TV company to pay an annual dividend of approximately 30 cents per share and for the newspaper company dividend to be around 20 cents. Both companies will be headquartered in Dallas, with some changes necessary at HQ to accommodate two publicly traded companies, but essentially the same people managing each company as today. There are also likely to be some linkages, but via alliances and partnerships rather than co-ownership.

"Regrettably, regulatory obstacles to cross-ownership remain in place. We have been firm believers in media convergence for a long time and continue to think convergence is very important to the long-term interests of newspapers and television stations. Relaxation of media ownership rules is long overdue. That notwithstanding, our experience with virtual cross-ownership in numerous markets suggests that some synergies across print, broadcast and online media can be effectively achieved through alliances and partnerships," said Decherd in announcing the decision to split Belo in two.

Once the split comes, there will be some differences in the boards of directors, but also considerable overlap. In addition to Decherd and Shive, the board of Belo Corp. (TV) will consist of Henry P. Becton, Jr. (lead director), James M. Moroney III, Judith L. Craven, Dealey D. Herndon, Wayne R. Sanders, William T. Solomon, M. Anne Szostak and Lloyd D. Ward. In addition to Decherd, current Belo directors J. McDonald Williams (lead director), Douglas G. Carlston, Louis E. Caldera, Dealey D. Herndon and Laurence E. Hirsch will serve on the board of the new A. H. Belo (newspapers).