CableOne will become an independently traded public company next year following the separation from Graham Holdings Co – known as the Washington Post Co until last year when Amazon’s Jeff Bezos bought the namesake newspaper. The news about CableOne, which made headlines this year when it dropped Viacom’s channels, lifted GHC’s share price 12.8% to a 52-week high.
The change will enable GHC to “pursue continued growth opportunities, while enabling CableOne to focus entirely on its video, Internet and voice services and to attract a more natural stock base,” company chairman Donald Graham says. This morning’s release does not discuss specific terms for the spinoff but says that it will be tax-free to shareholders.
CableOne has seen mixed results from its surprising decision in April to go without Viacom channels including Nickelodeon, Comedy Central, MTV, and BET. It ended Q3 with 476,233 video subs – down 15.1% from the same period last year. But it eeked out a 1% increase in profits which the company attributed in part to the 4% decline in its operating expenses. Viacom CEO Philippe Dauman told analysts yesterday others won’t follow CableOne and small operators that dropped its channels. They “are continuing to lose video subscribers. We are really core services. That’s why we are the first stop for any new distributor out there, and the first stop for existing distributors who want to launch new services.”
Following the spin off, GHC will consist of the Kaplan test preparation company; five TV stations (formerly known as the Post-Newsweek Group); print and online publications including Slate, The Root, and Foreign Policy; and investments in other advertising and business enterprises.