Newspaper companies are transforming their business models to better position themselves in a multi-platform media universe. According to industry experts, newspaper companies will focus more on mobile devices, online advertising based on user experience and personalized content to lower their dependence on traditional advertising revenues. They are also streamlining their cost structure, strengthening their balance sheet and restructuring their portfolio.

Newspaper publishing companies are diversifying their revenue base. They are making endeavors to expand their presence in broadcasting and digital products with the aim of lowering dependency on soft print media business and traditional advertising, thereby reducing susceptibility to economic conditions. In line with this, Gannett Co., Inc. (GCI) , The McClatchy Company (MNI) , Tribune Publishing Company, now known as tronc, Inc. (TRNC) and Hearst newspaper group joined forces to form a new national advertising network – Nucleus Marketing Solutions – with the goal to assist advertisers in reaching out to a mass audience.

Newspaper publishing are even separating their broadcasting and digital properties from the sluggish print business. TEGNA Inc. ( TGNA) was formed after the parent company, Gannett spun off its Broadcasting and Digital and Publishing units into two separate entities. The publishing division retained the name of the parent company, Gannett Co., Inc. This is not the first time that any media company has spun off its publishing unit.

The recent trend seen in the industry is that of consolidation. With an aim to strengthen its position in the newspaper industry, Gannett, in Oct 2015 entered into a deal to acquire Journal Media Group, Inc., the owner of the Milwaukee Journal Sentinel and other newspapers. In Apr 2016, the company completed the acquisition of all of the remaining shares. Journal Media Group was formed after Journal Communications and E.W. Scripps merged their broadcasting operations and split the newspaper business. The merged broadcast and digital media company, headquartered in Cincinnati, retained the name, The E.W. Scripps Company (SSP).

Publishing companies have been offloading assets that bear no direct relation to the core operations. The New York Times Company in May 2012 divested its remaining stake (210 Class B units) in the Fenway Sports Group, theowner of the Boston Red Sox and the Liverpool Football Club, for $63 million. Another example of asset shedding by the company is the Dec 2011 sale of Regional Media Group, which was long grappling with shrinking advertising revenues.

Waning print advertising revenues, in an uncertain economy, compelled The New York Times Company to take this tough decision of divesting Regional Media Group, part of The New York Times Media Group. This helped the company to renew its focus on its core newspapers and pay more attention to its online activities. The divestiture was also considered part of the cost-containment efforts undertaken to stay afloat in this soft environment.

With a strategic and steady newspaper budget, we could see fewer layoffs, increased focus on web and local content, improved subscription and concentration on profitable circulation. We observe that newspapers are turning more subscriber-oriented, offering reports in line with readers' choice. We expect paywall strategies, new pricing techniques and product innovation to generate more revenues for the newspaper companies.

We also believe that separating the publishing division will help to better exploit the potential of the broadcasting and digital businesses. Moreover, once the companies are spun off, these will have separate management teams and a much more defined capital structure that will provide ample room for strategic decisions related to any investment, acquisition or a new endeavor that can benefit that particular business, and in no way affect the other.

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