Belo Corp. — owner of WCNC, the NBC affiliate in Charlotte — just blew itself up.
Belo announced plans today to split its TV and newspaper operation into separate companies, a move analysts say is designed to buy it time as the newspaper business continues to slide downhill. The Dallas Morning News will be the flagship of a new newspaper-only company.
While the spinoff was viewed as generally a good way for Belo to salvage value from a weakening situation, Fitch Ratings promptly downgraded Belo debt to junk status, citing the fundamental change in the business model and the loss of newspaper revenue for the TV side of the operation.
At least as interesting, however, is the way the move creates a relatively compact newspaper biz that might itself merge with some other struggling chain of papers.
