NEW YORK (Real Money) -- It's genius. I am talking about how Gannett will now split into two companies -- publishing and digital and broadcasting -- creating a huge amount of instant value. How can it do that? Because of the steal of Cars.com, a website that it just paid $1.8 billion to acquire the 73% stake it did not already own.
Gannett (GCI) always had a lot of hidden assets underneath its publishing empire, which includes the USA Today and a host of other newspapers including the Des Moines Register, Indianapolis Star, Arizona Republic and Nashville's Tennessean.
When you consider the recently completed merger with A.H. Belo (AHC), Gannett, with 42 television stations, is now the largest independent top 25 TV station owner, covering a third of the country. It is the number one affiliate group for both CBS and NBC, as well as the fourth-largest ABC affiliate.
With Cars.com it will among the top five car sellers by average visitors. Yahoo Cars is the big daddy, with 25 million unique monthly viewers. But Cars.com is clustered around 15 million, with Autotrader and Kelley Blue Book and Edmunds.
It also owns Career Builder, the largest job wanted site, with listings for more than 1.6 million jobs.
TheStreet's Jim Cramer talks about Gannett on the floor of the NYSE:
When you merge Cars.com and Career Builder, you own the largest classified business in the country. When you combine it with the broadcasting interests, you have a powerhouse of communications, one that may be worth much more than the $5 billion current valuation of the pre-split company. That's right, the new Gannett spin-off could be worth the whole company -- and you get the papers for free.
I think this split into two companies is much like when Time Warner (TWC) spun off Time Inc. and immediately got a higher valuation. Old Gannett, the newspaper Gannett will be the Time Inc portion and New Gannett will be the digital/broadcast portion. Both become natural acquirers of other properties and will be on certain growth paths.