The board of directors of Gray Television Inc. on Tuesday announced a plan to spin off its newspaper publishing division into a new public company named Triple Crown Media.
The Daily Post, four other Gray newspapers and GrayLink Wireless, a provider of pager and other wireless services, will make up the new Triple Crown company. Basically, the move breaks Gray's television arm and the newspaper division into two separate companies. Gray owns 36 television stations.
Company officials expect that both Gray Television and Triple Crown Media will be better able to focus financial and operational resources on their own businesses, execute their own strategic plans and have greater financial flexibility to support growth opportunities.
In concert with the move, Gray and Bull Run Corp. announced an agreement to merge Bull Run into Triple Crown Media immediately following the spinoff.
Bull Run's sole operating business, Host Communications Inc., a collegiate sports marketing, printing and publishing company in Lexington, Ky., is under the leadership of Thomas Stultz.
Stultz, former president of Gray's newspaper publishing business and former publisher of the Gwinnett Daily Post, will head up Triple Crown Media.
Triple Crown also will be headquartered in Lexington.
Gray's newspaper publishing business consists of five daily newspapers with total daily circulation of about 120,000 and Sunday circulation of about 160,000. Gray's GrayLink Wireless business is a leading provider of primarily paging and other wireless services in nonmajor metropolitan areas in Alabama, Florida and Georgia, where it also operates 14 retail locations.
The move will be transparent to the Gwinnett Daily Post's staff and readers, Publisher Bob McCray said.
"Our news and advertising philosophies won't change. We will continue to emphasize the local market by covering local news and allowing advertisers to access our local readership.
"The potential synergy created by merging the tremendous growth of the Gwinnett Daily Post with the Internet expertise, marketing talent and sports affiliations of Host Communications is very powerful. We expect that we will be able to offer our readers and advertisers an enhanced product as a result of forming this new company," McCray said.
Stultz said the new grouping of businesses should work well for Triple Crown.
"I am very excited about the prospects of combining the revenue from the newspaper publishing and GrayLink Wireless businesses with the growth potential we have with Host. This will be a great combination of businesses that complement one another and will serve to accelerate the growth in each of these businesses beyond what they could achieve independently."
Robert Prather, president of Gray Television, said the spinoff allows both companies to operate independently and more efficiently.
"We believe the spinoff is a very intelligent way to separate our businesses in a tax-efficient manner that allows our broadcasting and newspaper businesses to maximize their strategic objectives, and by combining with Bull Run, Triple Crown Media will benefit from the proven leadership of Tom Stultz and combine complementary businesses. In addition, the transactions avoid the incurrence of significant standalone costs that Triple Crown Media would need to incur were it spun off in a stand-alone transaction," Prather said.
On a combined basis, after the merger, current shareholders of Gray will own about 95 percent of the outstanding common stock of Triple Crown Media.