A.H. Belo Corp (BLC), Gannett Co., Inc. (GCI): Why Wall Street Loves Media’s New TV Star

“I think what we have is tremendous financial flexibility,” she said on a conference call with analysts. “We have a balance sheet that is actually even financially stronger today.”

In the newspaper industry, companies have seen the wisdom of expanding their traditional identities. The Washington Post Company (NYSE:WPO) has benefited mightily from owning the Kaplan education operation, while the controlling Bancroft family sold Dow Jones to Rupert Murdoch’s News Corp (NASDAQ:NWS). in 2007. Meanwhile, speculation persists that New York Mayor Michael Bloomberg, whose third term in office will conclude at the end of the year, will seek to acquire The New York Times Company (NYSE:NYT).

“No longer is Gannett a newspaper company with broadcast and digital assets,” media analyst Ken Doctor wrote to subscribers. “It can now be thought of as a broadcast company with major newspaper and digital assets.”

Doctor noted that Gannett is projecting that roughly two-thirds of operating profits will come from broadcasting operations. That’s up from 56% last year.

Wall Street is encouraged by Gannet’s move for two key reasons. It recognizes that Gannett will likely stand a better shot at withstanding any coming problems in the newspaper industry, as papers grapple with the arduous challenges of making money on the Internet and discovering new advertising-revenue sources.

Crucially, the investment community appreciates a company that likes to play ball. Gannett takes great pride in its flagship property, USA Today, as well as its much smaller U.S. dailies. I know this lesson well. You see, I worked for USA Today for a few years in the 1980s.

For old times’ sake, Gannett will likely always like to think of itself as being true to its roots as a newspaper company. But executives will wisely not say so in public or anywhere within earshot of investors.

Wall Street wants Gannett to be a television dynamo, and that is what it is.

The article Gannett: Why Wall Street Loves Media’s New TV Star originally appeared on Fool.com is written by John Friedman.

Fool contributor John Friedman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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