Obama told me so

Tuesday, 5 August 2014

Gannett splits publishing, broadcasting in two

MCLEAN, Va. -- Gannett is splitting its broadcast and publishing business in two, joining other major media players in allowing fast growing TV and digital operations to operate more freely.

The media company also announced Tuesday that it would take full ownership of Cars.com for $1.8 billion.

Shares of Gannett surged more than 9 percent in premarket trading, hitting levels not seen since early 2008.

Last year Gannett acquired Belo Corp. for about $1.5 billion, almost doubling the number of TV stations it controls. Talk of a split was raised almost immediately as the broadcast division's dominance grew over the publishing wing, something that has happened across the media sector as digital media evolves.

Gannett Co. said Tuesday that the publishing business will basically be debt free once spun off, with the broadcasting and digital businesses holding the existing debt.

Gannett's broadcasting business now operates 46 television stations. The digital business includes websites such as CareerBuilder and will also now include Cars.com. The publishing company will house USA Today as well as 81 local U.S. daily publications and Newsquest, a regional community news provider in the U.K.

The publishing business will keep the Gannett name, while the broadcasting and digital company has yet to be named. Both companies will remain headquartered in McLean, Virginia. The broadcasting and digital company will trade on the New York Stock Exchange. The publishing business is also expected to trade on the NYSE.

Gracia Martore will serve as CEO of the broadcasting and digital company. Robert J. Dickey, currently president of Gannett's U.S. Community Publishing division, will become CEO of the publishing company.

If approved by its board, Gannett anticipates distribution of shares of the new entity holding the publishing business to be completed by the middle of next year.

Gannett is buying the 73 percent interest in Classified Ventures LLC, owner of Cars.com that it doesn't already own. Cars.com lets people compare vehicles online and connects them with sellers and dealers. The web site displays about 4.3 million new and used cars from nearly 20,000 dealers.

Gannett will finance the Cars.com transaction with available cash, approximately $650 million to $675 million in new senior notes and borrowings under its revolving credit agreement. The deal is expected to close in the fourth quarter.

Gannett's stock jumped $3.18 to $37.50 before the market opened.

How the Dow Jones average fared Tuesday

Renewed concerns that tensions could flare up between Russian and Ukraine pushed U.S. stocks sharply lower Tuesday. Several traders pointed to news reports of a buildup in Russian troops on the Ukraine border and comments from a Polish politician that reportedly said Russia was poised to invade or pressure Ukraine's eastern border as catalysts for the selling.

On Tuesday:

The Dow lost 139.81 points, or 0.8 percent, to close at 16,429.47.

The Standard & Poor's 500 index fell 18.78 points, or 1 percent, to 1,920.21.

The Nasdaq composite fell 31.05 points, or 0.7 percent, to 4,352.84.

For the week:

The Dow is down 63.90 points, or 0.4 percent.

The S&P 500 is down 4.94 points, or 0.3 percent.

The Nasdaq is up 0.19 of a point, effectively unchanged.

For the year:

The Dow is down 147.19 points, or 0.9 percent.

The S&P 500 index is up 71.85 points, or 3.9 percent.

The Nasdaq is up 176.25 points, or 4.2 percent.

Adams County opts out of building codes

NATCHEZ, Miss. -- Adams County won't have building codes.

The Natchez Democrat reports (http://bit.ly/1tRo48N ) the Board of Supervisors voted Monday to opt out of a zoning ordinance the state legislature had instructed counties to adopt.

While the city of Natchez has building codes, the areas of Adams County outside the city limits remain largely unregulated in terms of what can be built — and how it can be built — on private or business property.

The legislative measure would have required any counties that didn't have building code requirements to adopt one of three state-approved codebooks, but included a provision that also allowed counties to opt out entirely.

President Darryl Grennell says most of the community response to the proposed code adoption was against it, and the board affirmed those feelings.

Gannett splits publishing, broadcasting in 2

Gannett is splitting its broadcast and publishing business in two, joining other major media players in allowing fast growing TV and digital operations to operate more freely and not be weighed down by the declining newspaper business.

The media company also announced Tuesday that it would take full ownership of Cars.com for $1.8 billion.

Shares of Gannett, which owns 46 TV stations, USA Today and 81 other newspapers and websites such as CareerBuilder, rose more than 3 percent in premarket trading.

The spinoff of the publishing unit follows similar maneuvers by other major operators like Time Warner Inc., News Corp. and the Tribune Co., which completed a split with its division that publishes The Los Angeles Times and other newspapers on Monday. Media companies have been taking action to separate sluggish newspaper operations from more profitable broadcast units, as the industry adapts to consumers' increasing taste for digital content.

CEO Gracia Martore said the "bold actions" will help increase value for shareholders "in today's increasingly digital landscape."

Gannett Co. said Tuesday that the publishing business will basically be debt free once spun off, with the broadcasting and digital businesses holding the existing debt.

If approved by its board, Gannett anticipates distribution of shares of the new entity holding the publishing business to be completed by the middle of next year.

Gannett's stock rose $1.15, or 3.4 percent to $35.47 in premarket trading shortly before the market open.

Improving housing market luring would-be brokers

MIAMI -- The number of U.S. real estate agents is increasing as the housing market recovers from the Great Recession.

Applications for new real estate licenses doubled in Florida and California last year. Even hard-hit Nevada has seen the number of people seeking licenses grow by almost a quarter.

And the National Association of Realtors says its membership grew slightly last year after six straight years of declines.

Experts warn that real estate is a tough profession and that many new agents quit before they sell a single house.

Walgreen drops on report it will keep US tax base

WASHINGTON -- Shares of Walgreen Co. fell Tuesday on media reports that the nation's largest drugstore chain will not reincorporate itself overseas — a politically touchy move that could have significantly lowered its tax bill.

Walgreen owns a 45 percent stake in Alliance Boots, the largest drugstore chain in the United Kingdom. Walgreen has said it will soon announce whether it will acquire the remaining stake of the company. It has been considering whether to use an organization technique called an inversion to take advantage of the U.K's lower corporate tax rate.

Sky News of the U.K. reported Tuesday, citing people it did not identify, that Deerfield, Illinois-based Walgreen will acquire Alliance Boots, but without moving its tax base overseas.

Walgreen said late Tuesday that it would announce "several updates to its strategic transaction" with Boots on Wednesday. The company runs more than 8,200 drugstores in the U.S.

Company shares fell $2.99, or 4.2 percent, to close at $69.12 in trading Tuesday. They added 1.3 percent to $70.01 in after-hours trading.

The reports come as President Barack Obama and members of Congress have denounced inversions as an unpatriotic trick used to dodge U.S. taxes.

In an inversion, a U.S. business combines with a foreign company in a country with a lower tax rate, allowing the company to lower its tax bill. Frequently the companies maintain their U.S. headquarters and operations, and the U.S. entity often maintains control of the company.

Dozens of U.S. companies have completed inversions in recent years, and they're especially popular with health care companies that have extensive overseas operations. But elected officials have raised concerns about the tax revenue the federal government is losing as a result of the deals.

At 35 percent, the United States has the highest corporate income tax rate in the industrialized world. The U.S. also taxes income that's earned overseas but brought back to the U.S.

While some Democrats are pushing to make it harder for U.S. firms to reincorporate overseas, Republicans argue that Congress should lower the corporate tax rate so that businesses won't feel the need to leave the U.S.

On Tuesday, the Treasury Department said that legislation from Congress is the only way to address the problem fully. However, since inversions are eroding the U.S. tax base, the Obama administration plans to seek ways to provide a partial fix without requiring new laws from Congress.

Poll: Americans diverge on how to pay for highways

WASHINGTON -- A majority of Americans think the economic benefits of good transportation outweigh the cost to taxpayers, but they can't agree on how to pay for new highways or repairs of old ones, according to a new Associated Press-GfKpoll.

Six in 10 people surveyed said the cost of good highways, railroads and airports is justified by their benefits. Among those who drive places multiple times per week, 62 percent say the benefits outweigh the costs. Among those who drive less than once a week or not at all, 55 percent say the costs are worthwhile.

Yet a majority of Americans bristle at the most commonly proposed ideas from public officials and industry. For example, 58 percent oppose raising federal gasoline taxes to fund transportation projects such as the repair, replacement or expansion of roads and bridges. Only 14 percent support an increase. And by a better than 2-to-1 margin, Americans oppose having private companies pay for the construction of new roads and bridges in exchange for the right to charge tolls. Moving to a usage tax based on how many miles a vehicle drives also draws more opposition than support — 40 percent oppose it, while 20 percent support it.

Support for shifting more responsibility for paying for such projects to state and local government is a tepid 30 percent.

Small wonder then that Congress has kept federal highway and transit programs teetering on the edge of insolvency for years, unable to find a politically acceptable long-term source of funds. The public can't make up its mind on how to pay for them either.

"Congress is actually reflecting what people want," said Joshua Schank, president and CEO of the Eno Center for Transportation, a transportation think tank. "People want to have a federal (transportation) program and they don't want to pay for it."

Last week, Congress cobbled together $10.8 billion to keep transportation aid flowing to states by changing how employers fund worker pension programs, extending customs user fees and transferring money from a fund to repair leaking underground fuel storage tanks. The money was needed to make up a shortfall between aid promised to states and revenue raised by the federal 18.4 cents-per-gallon gas tax and the 24.4 cents-per-gallon diesel tax, which haven't been increased in more than 20 years.

It's the fifth time in the last six years that Congress has patched a hole in the federal Highway Trust Fund that pays for highway and transit aid. Each time it gets more difficult for lawmakers to find the money without increasing the federal budget deficit. Critics described the pension funding changes used this time as budget gimmicks that would cost the government more in the long run and undermine employee pension programs.

The latest patch cleared Congress about three hours before midnight last Thursday, the day before the Transportation Department said it would begin cutting back aid payments to states. The current fix is only expected to cover the revenue gap through next May, when Congress will be back where it started unless lawmakers act sooner.

The most direct solution would be to raise fuel taxes. That's what three blue-ribbon federal commissions have recommended. But opposition to a gas tax increase cuts across party lines, although Republicans are more apt to oppose an increase, 70 percent, than Democrats, 52 percent.

"Every time we turn around there's another tax, and our gas taxes are so high now," said James Lane, 52, of Henry County in rural south-central Virginia, who described himself as leaning toward the GOP.

Lane favors allowing companies to pay for the construction of new or expanded roads and bridges in exchange for the right impose tolls on motorists, often for many decades. There have been projects like that in Virginia, but since those roads are in more populated areas of the state where he doesn't drive it makes sense to have the people who use them pay for them, he said.

But Michael Murphy, 63, a data services contractor who lives near San Antonio, Texas, where a high-speed public-private toll road is scheduled to open this fall, said he'd rather see gas taxes increased than tolls imposed on drivers. Roads benefit everyone, even if indirectly, so it's only fair that everyone who drives pays something toward their cost, he said.

A majority of those surveyed, 56 percent, say traffic in the area where they live has gotten worse in the last five years. Only 6 percent say traffic has improved in their area, and 33 percent that it's stayed about the same.

Thirty-five percent say the quality of the roads and bridges where they live is getting worse, while 25 percent think their roads and bridges are improving. About 4 in 10 say their local roads and bridges are neither improving nor getting worse.

The AP-GfK Poll was conducted July 24-28 using KnowledgePanel, GfK's probability-based online panel designed to be representative of the U.S. population. It involved online interviews with 1,044 adults. It has a margin of sampling error of plus or minus 3.4 percentage points for all respondents, larger for subgroups.

Respondents were first selected randomly using phone or mail survey methods, and were later interviewed online. People selected for KnowledgePanel who didn't otherwise have access to the Internet were provided with the ability to access the Internet at no cost to them.

---

Online:

AP-GfK Poll: http://bit.ly/1p3ze84