<PAGE> 1
Filed In Pursuant to Rule
No. 424(b)(1) File No. 333-53315
PROSPECTUS
5,500,000 SHARES
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
------------------------
SCRIPPS LOGO
Of the 5,500,000 Class A Common Shares, $.01 par value (the "Shares"), of
The E.W. Scripps Company (the "Company") being offered hereby, 3,055,556 are
being offered by The Edward W. Scripps Trust (the "Scripps Trust") and 2,444,444
shares are being offered by The Jack R. Howard Trust (the "Howard Trust," and
together with the Scripps Trust, the "Selling Shareholders"). The Company is not
offering any of its capital stock hereby and will not receive any proceeds from
the sale of the Shares by the Selling Shareholders. See "Selling Shareholders."
Of the 5,500,000 Shares offered hereby, 4,400,000 Shares are being offered
initially in the United States and Canada by the U.S. Underwriters (the "U.S.
Offering"), and 1,100,000 shares are being offered initially in a concurrent
international offering outside the United States and Canada by the International
Manager (the "International Offering," and together with the U.S. Offering, the
"Offerings"). The public offering price and the underwriting discount per Share
are identical for each of the Offerings. See "Underwriting."
The Class A Common Shares are listed on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "SSP." On June 11, 1998, the last reported sale
price of the Class A Common Shares on the NYSE was $50 7/16 per share. See
"Price Range of Class A Common Shares and Dividends."
Holders of Class A Common Shares are entitled to elect the greater of three
or one-third of the directors of the Company, but are not entitled to vote on
any other matters except as required by Ohio law. Holders of Common Voting
Shares of the Company are entitled to elect all remaining directors and to vote
on all other matters requiring a vote of shareholders. Holders of Class A Common
Shares and Common Voting Shares are entitled to the same cash dividends and to
share equally in distributions on liquidation of the Company. Each Common Voting
Share is convertible into one Class A Common Share. See "Description of Capital
Stock."
After giving effect to the sale of the Shares (and assuming that the
Underwriters' over-allotment options are not exercised), the Scripps Trust will
own approximately 48.0% of the outstanding Class A Common Shares and
approximately 83.5% of the outstanding Common Voting Shares and will continue to
control the Company, and the Howard Trust will own approximately 1.4% of the
outstanding Class A Common Shares and approximately .9% of the outstanding
Common Voting Shares. See "Selling Shareholders."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
========================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT (1) SHAREHOLDERS(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................................... $50.00 $1.125 $48.875
- ------------------------------------------------------------------------------------------------------------------------
Total (3).......................................... $275,000,000 $6,187,500 $268,812,500
========================================================================================================================
</TABLE>
(1) Each of the Company and the Selling Shareholders has agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting expenses of the Offerings payable by the Selling
Shareholders estimated at $321,000.
(3) The Scripps Trust and the Howard Trust have granted to the U.S. Underwriters
and the International Manager, on a pro rata basis, options to purchase up
to an aggregate additional 458,333 Shares and 366,667 Shares, respectively,
in each case exercisable within 30 days of the date hereof, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount and Proceeds to Selling Shareholders
will be $316,250,000, $7,115,625 and $309,134,375, respectively. See
"Underwriting."
------------------------
The Shares are being offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to the approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Shares will be made in New York, New York on or about June 17,
1998.
------------------------
MERRILL LYNCH & CO.
------------------------
The date of this Prospectus is June 12, 1998.
<PAGE> 2
Images:
- - Photo of paint cans with Home & Garden Television logos on the lids.
- - Photo of TV news reporter reporting live.
- - Photo of teenagers taping a television show especially for teen viewers.
- - Food Network logo.
- - Photo of chef Emeril Lagasse, host of a show on Food Network.
- - Photo of title image from America's Castles, a television series produced by
Cinetel Productions.
- - Picture of the PEANUTS characters.
- - Front page of several Florida newspapers.
- - Photo of people reading the Denver Rocky Mountain News and the Boulder (CO)
Daily Camera.
- - Photo of computer screen showing the Internet site of the Knoxville News
Sentinel.
- - Picture of the DILBERT characters.
<PAGE> 3
CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SHARES. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
------------------------
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such materials can be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants, such as the Company, that submit
electronic filings to the Commission. Such material may also be inspected and
copied at the offices of the New York Stock Exchange, on which the Class A
Common Shares of the Company are listed, at 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Shares offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Shares offered hereby reference is made to the Registration Statement.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete; and with respect to
each such contract, agreement or other document filed, or incorporated by
reference, as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved and each such
statement shall be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998.
3. The Company's Current Report on Form 8-K filed June 11, 1998.
4. The description of the Company's Class A Common Shares contained in the
Company's Registration Statement on Form 10 (File No. 1-11969).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Shares shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the Registration Statement or this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF
ANY OR ALL DOCUMENTS WHICH HAVE BEEN INCORPORATED BY REFERENCE HEREIN, OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO VICE PRESIDENT -- INVESTOR
RELATIONS, THE E.W. SCRIPPS COMPANY, 312 WALNUT STREET, 28TH FLOOR, CINCINNATI,
OHIO 45202 (TELEPHONE: (513) 977-3825; E-MAIL: [email protected]).
3
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[THIS PAGE LEFT INTENTIONALLY BLANK]
4
<PAGE> 5
PROSPECTUS SUMMARY
This summary is qualified in its entirety by the more detailed information
and consolidated financial statements appearing in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997, and the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998, which are incorporated
by reference herein. Unless otherwise indicated, the information in this
Prospectus does not give effect to the exercise of the Underwriters'
over-allotment options described under "Underwriting."
THE COMPANY
The Company is a diversified media company operating daily newspapers,
network-affiliated broadcast television stations, cable television networks and
licensing and syndication businesses.
Founded by Edward W. Scripps, the Company began operating its first
newspaper in 1878 and its first television station in 1947. Three members of the
Company's Board of Directors are direct descendants of the founder, and the
Scripps Trust, established by the founder in 1922, owns a controlling interest
in the Company. The Company emphasizes quality, editorial independence,
editorial integrity, and public service in managing its media businesses. The
Company's revenues, EBITDA (as defined herein) and net income for the twelve
months ended March 31, 1998 were $1,298 million, $339 million and $153 million,
respectively.
Newspapers. The Company is the tenth largest newspaper publisher in the
United States, with daily newspapers reaching 20 separate markets and total
circulation of approximately 1.4 million daily and 1.6 million Sunday. From its
Washington bureau, the Company operates the Scripps Howard News Service, a
supplemental wire service covering stories in the capital, other parts of the
United States and abroad. Newspapers generated approximately 60% of the
Company's total revenues in 1997.
Broadcast Television. The Company owns and operates nine network-affiliated
broadcast television stations, eight of which are located in one of the top 50
largest television markets. Six stations are ABC affiliates and three are NBC
affiliates. In addition to broadcasting network programming, the Company's
television stations focus on producing quality local news programming. Broadcast
television generated approximately 27% of the Company's total revenues in 1997.
Category Television. The Company operates Home & Garden Television, a
24-hour cable network ("HGTV"), has an approximate 56% controlling interest in
The Television Food Network, G.P. which operates a 24-hour cable network ("Food
Network") and has a 12% equity interest in SportSouth, a regional cable network.
According to the Nielsen Homevideo Index, HGTV was telecast to 40.2 million
homes in March 1998, up 15.1 million from March 1997, and Food Network was
telecast to 31.7 million homes in March 1998, up 9.7 million from March 1997.
Management believes the popularity of HGTV and Food Network, which consistently
rank among the favorite channels of cable television subscribers, will enable
the Company to expand distribution and attract additional advertising revenue.
Category television generated approximately 5% of the Company's total revenues
in 1997, and is the fastest-growing segment of the Company.
Licensing and Other Media. The Company, under the trade name United Media,
is a leading distributor of news columns, comics and other features for the
newspaper industry, including PEANUTS(R) and DILBERT(R), and licenses worldwide
copyrights relating to PEANUTS, DILBERT and other characters. The Company also
creates, develops and produces nonfiction television programming for domestic
and international distribution through its Cinetel Productions division.
Licensing and other media generated approximately 8% of the Company's total
revenues in 1997.
The Company, an Ohio corporation, maintains its principal executive offices
at 312 Walnut Street, 28th Floor, Cincinnati, Ohio, and its telephone number is
(513) 977-3000.
5
<PAGE> 6
THE OFFERINGS
Class A Common Shares Offered
Hereby(1):
Scripps Trust.................. 3,055,556
Howard Trust................... 2,444,444
Total..................... 5,500,000
Common Shares Outstanding as of
April 30, 1998:
Class A Common Shares.......... 61,581,488
Common Voting Shares........... 19,218,913
Total..................... 80,800,401
Use of Proceeds and Expenses........ The Company will not receive any
proceeds from the sale of the Shares.
Expenses of the Offerings will be paid
by the Selling Shareholders.
Voting and Other Rights............. Holders of Class A Common Shares are
entitled to elect the greater of three
or one-third of the directors of the
Company, but are not entitled to vote
on any other matters except as required
by Ohio law. Holders of Common Voting
Shares are entitled to elect all
remaining directors and to vote on all
other matters requiring a vote of
shareholders. Class A Common Shares and
Common Voting Shares are entitled to
the same cash dividends and to share
equally in distributions on liquidation
of the Company. Each Common Voting
Share is convertible into one Class A
Common Share.
Dividend Policy..................... The Company has declared cash dividends
in every year since its incorporation
in 1922. Dividends paid in 1996 and
1997 were $.52 per share. Dividends
paid in the three months ended March
31, 1998, were $.13 per share. Future
dividends are subject to, among other
things, the Company's earnings,
financial condition and capital
requirements.
NYSE Symbol for Class A Common
Shares.............................. SSP
- ------------------------------
(1) Assuming the Underwriters' over-allotment options are not exercised.
RECENT DEVELOPMENTS
Consolidated revenues of the Company for May 1998 increased 11% to $130
million, compared to $117 million in May 1997. For comparative purposes, such
revenues exclude divested operations and include acquired operations as if they
had been purchased on January 1, 1997.
Newspaper advertising moved up 13% to $59.7 million compared to $53 million
for the same month a year ago, benefiting from the additional Sunday in May 1998
versus 1997. Classified advertising for May increased 18% to $25.6 million
compared to $21.7 million in 1997. Total newspaper revenues were up 11% to $78.9
million from $71.2 million for May 1997.
Broadcast television revenues increased 2% to $31.4 million compared to
$30.7 million in May 1997. Political advertising was $1.6 million compared to
none in May 1997.
Category television revenues increased 88% to $12 million from $6.4 million
in the same period a year ago. The number of HGTV subscribers reached 41.4
million in May, up 300,000 from the previous month, according to the Nielsen
Homevideo Index. The number of Food Network subscribers reached 32.7 million in
May, up 400,000 from the previous month, according to the Nielsen Index.
6
<PAGE> 7
SUMMARY OF CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- --------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating Revenues:
Newspapers........................ $ 215.1 $ 165.1 $ 723.8 $ 630.5 $ 602.1
Broadcast television.............. 74.8 72.7 331.2 323.5 295.2
Category television............... 29.1 9.5 58.4 22.1 11.3
Licensing and other media......... 29.1 24.0 94.7 87.1 76.9
-------- -------- -------- -------- --------
Total............................. $ 348.2 $ 271.3 $1,208.1 $1,063.1 $ 985.6
Eliminate intersegment revenue.... (1.4) (0.7) (4.4) (3.1) (1.1)
Divested operating units.......... -- 20.1 38.3 61.8 45.8
-------- -------- -------- -------- --------
Total operating revenues.......... $ 346.8 $ 290.7 $1,242.0 $1,121.9 $1,030.4
======== ======== ======== ======== ========
Operating Income (Loss):
Newspapers........................ $ 46.8 $ 40.4 $ 172.7 $ 134.0 $ 120.8
Broadcast television.............. 16.2 18.7 103.7 100.4 86.9
Category television............... (3.5) (2.9) (13.1) (17.9) (18.6)
Licensing and other media......... 3.4 3.5 6.2 8.9 7.1
Corporate......................... (4.5) (4.2) (17.2) (18.5) (16.8)
-------- -------- -------- -------- --------
Total............................. 58.4 55.5 252.3 206.9 179.4
Divested operating units.......... (0.9) 0.3 (1.4) 3.0 1.8
Unusual items..................... -- -- -- (4.0) --
-------- -------- -------- -------- --------
Total operating income............... $ 57.5 $ 55.9 $ 250.8 $ 205.9 $ 181.2
======== ======== ======== ======== ========
Income from continuing operations.... $ 25.1 $ 30.0 $ 157.7 $ 130.1 $ 93.6
PER SHARE DATA
Income from continuing operations.... $ .31 $ .37 $ 1.93 $ 1.61 $ 1.17
Adjusted income from continuing
operations........................ .31 .37 1.63 1.41 1.17
Dividends............................ .13 .13 .52 .52 .50
OTHER OPERATING DATA
EBITDA:
Newspapers........................ $ 62.7 $ 50.5 $ 217.1 $ 170.6 $ 155.5
Broadcast television.............. 22.6 24.9 128.0 126.2 113.0
Category television............... (0.8) (2.4) (9.3) (16.4) (17.6)
Licensing and other media......... 3.9 4.0 8.4 11.0 9.1
Corporate......................... (4.3) (3.9) (16.0) (17.4) (15.9)
-------- -------- -------- -------- --------
Total............................. $ 84.1 $ 73.2 $ 328.3 $ 274.1 $ 244.1
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
-------------------- --------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets......................... $2,252.2 $1,478.6 $2,280.8 $1,468.7 $1,349.7
Long-term debt (including current
portion).......................... 710.1 121.8 773.1 121.8 80.9
Stockholders' equity................. 1,071.9 970.4 1,049.0 944.6 1,191.4
</TABLE>
Note: Certain amounts may not foot as each is rounded independently.
7
<PAGE> 8
PRICE RANGE OF CLASS A COMMON SHARES AND DIVIDENDS
The Class A Common Shares are traded on the NYSE under the symbol "SSP."
The following table sets forth, for the periods indicated, the high and low
market prices for the Class A Common Shares on the NYSE, as reported by The Wall
Street Journal, and the cash dividends and other non-cash distributions declared
per share on the Class A Common Shares for the periods indicated.
<TABLE>
<CAPTION>
DISTRIBUTIONS
PRICE RANGE -----------------------
---------------------- CASH OTHER
HIGH LOW DIVIDEND NON-CASH
-------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1996
First Quarter..................................... $43 1/2 $38 1/8 $.13
Second Quarter.................................... 47 40 5/8 .13
Third Quarter..................................... 47 1/2 40 3/4 .13
Fourth Quarter.................................... 52 3/8 32 3/4 .13 $19.83(1)
1997
First Quarter..................................... $37 1/2 $32 5/8 $.13
Second Quarter.................................... 41 3/4 32 1/4 .13
Third Quarter..................................... 43 15/16 36 9/16 .13
Fourth Quarter.................................... 48 15/16 40 1/4 .13
1998
First Quarter..................................... $55 5/16 $45 1/16 $.13
Second Quarter (through June 11, 1998)............ 58 5/16 50 3/8 .13
</TABLE>
On June 11, 1998, the last reported sale price of the Class A Common Shares
on the NYSE was $50 7/16 per share. At April 30, 1998, there were approximately
5,000 owners of the Class A Common Shares and 18 owners of the Common Voting
Shares, based on security position listings.
DIVIDEND POLICY
The Company has declared cash dividends in every year since its
incorporation in 1922. Dividends in 1997 and 1996 were $.52 per share. Dividends
of $.13 per share were paid in the three months ended March 31, 1998. Future
dividends are subject to, among other things, the Company's earnings, financial
condition and capital requirements.
- ------------------------------
(1) On November 13, 1996, the Company's cable television systems were acquired
by Comcast Corporation through a merger whereby the Company's shareholders
received, on a tax-free basis, a total of 93 million shares of Class A
Special Common Stock of Comcast. For each share of the Company held,
shareholders received 1.15826 Comcast shares with a value of $19.83, based
on Comcast's November 13, 1996, closing price of $17.125 per share as
reported on the Nasdaq Stock Market.
8
<PAGE> 9
CAPITALIZATION
The following table sets forth the capitalization of the Company:
<TABLE>
<CAPTION>
MARCH 31,
1998
-------------
(UNAUDITED)
(IN MILLIONS)
<S> <C>
Long-term Debt (including current portion):
Variable rate credit facilities........................... $ 478.5
6.625% note, due in 2007.................................. 99.9
6.375% note, due in 2002.................................. 99.9
7.375% notes, due in 1998................................. 29.8
Other notes............................................... 2.1
--------
Total long-term debt...................................... $ 710.1
--------
Stockholders' Equity:
Preferred stock, $.01 par -- authorized: 25,000,000
shares; none outstanding
Common stock, $.01 par:
Class A -- authorized: 120,000,000 shares; issued and
outstanding: 61,553,530 (1).......................... $ .6
Voting -- authorized: 30,000,000 shares; issued and
outstanding: 19,218,913 shares....................... .2
--------
Total..................................................... $ .8
Additional paid-in capital................................ 263.9
Retained earnings......................................... 796.9
Unrealized gains on securities available for sale......... 15.1
Unvested restricted stock awards.......................... (5.0)
Foreign currency translation adjustment................... .2
--------
Total stockholders' equity................................ $1,071.9
--------
Total capitalization........................................ $1,782.0
========
</TABLE>
Note: Certain amounts may not foot as each is rounded independently.
- ------------------------------
(1) As of March 31, 1998, options for the purchase of 3,262,500 Class A Common
Shares were outstanding, of which options for 2,276,053 shares were
immediately exercisable.
9
<PAGE> 10
SELECTED CONSOLIDATED FINANCIAL DATA
The following summary income statement data and cash flow statement data
for the five years ended December 31, 1997, and balance sheet data as of those
same dates have been derived from the audited consolidated financial statements
of the Company. The following summary income statement and cash flow data for
the three months ended March 31, 1998, and balance sheet data as of that date
have been derived from the unaudited consolidated financial statements of the
Company. Those unaudited financial statements include, in management's opinion,
all adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the interim periods. The data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" and the more detailed information and consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997, and the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, incorporated by reference herein
and available as described under "Available Information" and "Incorporation of
Certain Documents by Reference." The interim results of operations are not
necessarily indicative of the results that may be expected for future interim
periods or for the full year. All per share amounts are presented on a diluted
basis.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ------------------------------------------------------
1998(1) 1997(1) 1997(1) 1996(1) 1995(1) 1994(1) 1993(1)
------- ------- -------- -------- -------- ------- -------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating Revenues:
Newspapers.................. $215.1 $165.1 $ 723.8 $ 630.5 $ 602.1 $563.9 $515.0
Broadcast television........ 74.8 72.7 331.2 323.5 295.2 288.2 254.9
Category television......... 29.1 9.5 58.4 22.1 11.3 -- --
Licensing and other media... 29.1 24.0 94.7 87.1 76.9 73.5 84.7
------ ------ -------- -------- -------- ------ ------
Total....................... $348.2 $271.3 $1,208.1 $1,063.1 $ 985.6 $925.6 $854.7
Eliminate intersegment
revenue................... (1.4) (0.7) (4.4) (3.1) (1.1) -- --
Divested operating
units(2).................. -- 20.1 38.3 61.8 45.8 39.0 90.6
------ ------ -------- -------- -------- ------ ------
Total operating
revenues............. $346.8 $290.7 $1,242.0 $1,121.9 $1,030.4 $964.6 $945.2
====== ====== ======== ======== ======== ====== ======
Operating Income (Loss):
Newspapers.................. $ 46.8 $ 40.4 $ 172.7 $ 134.0 $ 120.8 $116.0 $ 73.8
Broadcast television........ 16.2 18.7 103.7 100.4 86.9 94.5 69.1
Category television......... (3.5) (2.9) (13.1) (17.9) (18.6) (9.1) (0.5)
Licensing and other media... 3.4 3.5 6.2 8.9 7.1 5.4 4.7
Corporate................... (4.5) (4.2) (17.2) (18.5) (16.8) (15.5) (13.6)
------ ------ -------- -------- -------- ------ ------
Total....................... $ 58.4 $ 55.5 $ 252.3 $ 206.9 $ 179.4 $191.4 $133.5
Divested operating
units(2).................. (0.9) 0.3 (1.4) 3.0 1.8 0.2 9.4
Unusual items(3)............ -- -- (4.0) -- (7.9) (0.9)
------ ------ -------- -------- -------- ------ ------
Total operating
income............... $ 57.5 $ 55.9 $ 250.8 $ 205.9 $ 181.2 $183.6 $142.0
Interest expense.............. (12.0) (2.6) (18.5) (9.6) (11.2) (16.3) (26.4)
Net gains on
divestitures(1)............. -- -- 47.6 -- -- -- 91.9
Garfield copyright gain(4).... -- -- -- -- -- 31.6 --
Unusual credits
(charges)(5)................ -- -- (2.7) 21.5 -- (16.9) 2.5
Miscellaneous, net............ (1.4) 0.1 3.1 1.8 1.5 (0.9) (2.4)
Income taxes(6)............... (18.0) (22.5) (117.5) (86.0) (74.5) (80.4) (86.4)
Minority interests............ (1.0) (0.9) (5.1) (3.4) (3.3) (7.8) (16.2)
------ ------ -------- -------- -------- ------ ------
Income from continuing
operations.................. $ 25.1 $ 30.0 $ 157.7 $ 130.1 $ 93.6 $ 92.8 $104.9
====== ====== ======== ======== ======== ====== ======
PER SHARE DATA
Income from continuing
operations.................. $ .31 $ .37 $ 1.93 $ 1.61 $ 1.17 $ 1.21 $ 1.40
Adjusted income from
continuing operations(7).... .31 .37 1.63 1.41 1.17 1.25 .72
Dividends..................... .13 .13 .52 .52 .50 .44 .44
OTHER OPERATING DATA
EBITDA(8):
Newspapers.................. $ 62.7 $ 50.5 $ 217.1 $ 170.6 $ 155.5 $149.5 $109.7
Broadcast television........ 22.6 24.9 128.0 126.2 113.0 115.8 89.5
Category television......... (0.8) (2.4) (9.3) (16.4) (17.6) (9.1) (0.5)
Licensing and other media... 3.9 4.0 8.4 11.0 9.1 7.1 5.6
Corporate................... (4.3) (3.9) (16.0) (17.4) (15.9) (14.8) (13.0)
------ ------ -------- -------- -------- ------ ------
Total....................... $ 84.1 $ 73.2 $ 328.3 $ 274.1 $ 244.1 $248.5 $191.2
====== ====== ======== ======== ======== ====== ======
</TABLE>
- ---------------
Note: Certain amounts may not foot as each is rounded independently.
10
<PAGE> 11
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1998(1) 1997(1) 1997(1) 1996(1) 1995(1) 1994(1) 1993(1)
-------- -------- -------- -------- -------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOW STATEMENT DATA
Net cash provided by continuing
operations.................... $ 89.9 $ 54.9 $ 196.9 $ 176.2 $ 113.8 $ 170.2 $ 142.0
Depreciation and amortization of
intangible assets............. 25.8 18.3 77.6 69.4 66.6 58.9 60.8
Investing activity:
Capital expenditures.......... (12.1) (8.9) (56.6) (53.3) (57.3) (54.0) (36.8)
Business acquisitions and
investment expenditures..... (4.3) (11.0) (749.2) (127.7) (12.2) (32.4) (41.5)
Other (investing)/divesting
activity, net............... 1.3 (17.3) 30.6 35.0 (18.7) 51.3 146.9
Financing activity:
Increase (decrease) in
long-term debt.............. (63.0) -- 651.2 41.0 (29.7) (137.9) (194.0)
Dividends paid................ (10.9) (10.9) (46.0) (44.5) (42.6) (37.3) (37.0)
Purchase and retirement of
common stock................ -- -- (25.7) -- -- -- --
Other financing activity...... 2.3 2.1 3.0 8.5 5.5 1.7 1.9
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
------------------- ----------------------------------------------------
1997 1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets.................... $2,252.2 $1,478.6 $2,280.8 $1,468.7 $1,349.7 $1,286.7 $1,255.1
Long-term debt (including
current portion)(9)........... 710.1 121.8 773.1 121.8 80.9 110.4 247.9
Stockholders' equity(9)......... 1,071.9 970.4 1,049.0 944.6 1,191.4 1,083.5 859.6
</TABLE>
- ---------------
Note: Certain amounts may not foot as each is rounded independently.
NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA
The Company's cable television systems ("Scripps Cable") were acquired by
Comcast Corporation ("Comcast") on November 13, 1996 ("Cable Transaction")
through a merger whereby the Company's shareholders received, on a tax-free
basis, a total of 93 million shares of Comcast's Class A Special Common Stock.
The aggregate market value of the Comcast shares was $1.593 billion and the net
book value of Scripps Cable was $356 million, yielding an economic gain of
$1.237 billion to the Company's shareholders. This gain is not reflected in the
Company's financial statements as accounting rules required the Company to
record the transaction at book value. Unless otherwise noted, the data excludes
the cable television segment, which is reported as a discontinued business
operation.
(1) In the periods presented the Company acquired and divested the following:
ACQUISITIONS
1997 -- Daily newspapers in Abilene, Corpus Christi, Plano, San Angelo, and
Wichita Falls, Texas; Anderson, South Carolina; and Boulder,
Colorado (in exchange for the Company's newspapers in Monterey and
San Luis Obispo, California). Approximate 56% interest in The
Television Food Network.
1996 -- Vero Beach, Florida, daily newspaper.
1994 -- The remaining 13.9% minority interest in Scripps Howard Broadcasting
Company ("SHB") in exchange for 4,952,659 Class A Common Shares.
Cinetel Productions (an independent producer of programs for cable
television).
1993 -- Remaining 2.7% minority interest in the Knoxville News-Sentinel and
5.7% of the outstanding shares of SHB.
DIVESTITURES
1998 -- Expects to sell Scripps Howard Productions ("SHP"), its Los
Angeles-based fiction television program production operation.
1997 -- Monterey and San Luis Obispo, California, daily newspapers (in
exchange for Boulder, Colorado, daily newspaper). Terminated joint
operating agreement ("JOA") and ceased operations of El Paso daily
newspaper. The JOA termination and trade resulted in pre-tax gains
totaling $47.6 million, increasing income from continuing operations
$26.2 million, $.32 per share.
1995 -- Watsonville, California, daily newspaper. No material gain or loss
was realized as proceeds approximated the book value of net assets
sold.
11
<PAGE> 12
1993 -- Book publishing; newspapers in Tulare, California, and San Juan;
Memphis television station; radio stations. The divestitures
resulted in net pre-tax gains of $91.9 million, increasing income
from continuing operations $46.8 million, $.63 per share.
(2) Noncable television operating units sold prior to March 31, 1998, and SHP.
(3) Total operating income included the following:
1996 -- A $4.0 million charge for the Company's share of certain costs
associated with restructuring portions of the distribution system of
the Cincinnati JOA. The charge reduced income from continuing
operations $2.6 million, $.03 per share.
1994 -- A $7.9 million loss on program rights expected to be sold as a
result of changes in television network affiliations. The loss
reduced income from continuing operations $4.9 million, $.07 per
share.
1993 -- A change in estimate of disputed music license fees increased
operating income $4.3 million; a gain on the sale of certain
publishing equipment increased operating income $1.1 million; a
charge for workforce reductions at (i) the Company's Denver
newspaper and (ii) the newspaper feature distribution and the
licensing operations of United Media decreased operating income $6.3
million. The planned workforce reductions were fully implemented in
1994. These items totaled $0.9 million and reduced income from
continuing operations $0.6 million, $.01 per share.
(4) In 1994 the Company sold its worldwide Garfield and U.S. Acres copyrights.
The sale resulted in a pre-tax gain of $31.6 million, $17.4 million
after-tax, $.23 per share.
(5) Other unusual credits (charges) included the following:
1997 -- Write-down of investments totaling $2.7 million. Income from
continuing operations was reduced $1.7 million, $.02 per share.
1996 -- A $40.0 million gain on the Company's investment in Turner
Broadcasting Systems when Turner was merged into Time Warner; $3.0
million write-off of an investment in Patient Education Media, Inc.;
and $15.5 million contribution to a charitable foundation. These
items totaled $21.5 million and increased income from continuing
operations by $19.1 million, $.23 per share.
1994 -- An estimated $2.8 million loss on real estate expected to be sold as
a result of changes in television network affiliations; $8.0 million
contribution to a charitable foundation; and $6.1 million accrual
for lawsuits associated with a divested operating unit. These items
totaled $16.9 million and reduced income from continuing operations
$9.8 million, $.13 per share.
1993 -- A $2.5 million fee received in connection with the change in
ownership of the Ogden, Utah, newspaper. Income from continuing
operations was increased $1.6 million, $.02 per share.
(6) The provision for income taxes is affected by the following unusual items:
1994 -- A change in estimated tax liability for prior years increased the
tax provision, reducing income from continuing operations $5.3
million, $.07 per share.
1993 -- A change in estimated tax liability for prior years decreased the
tax provision, increasing income from continuing operations $5.4
million, $.07 per share; the effect of the increase in the federal
income tax rate to 35% from 34% on the beginning of the year
deferred tax liabilities increased the tax provision, reducing
income from continuing operations $2.3 million, $.03 per share.
(7) Excludes unusual items and net gains.
(8) Earnings before interest, income taxes, depreciation and amortization
("EBITDA") is presented in the Selected Consolidated Financial Data
because:
X Management believes the year-over-year change in EBITDA is a more
useful measure of year-over-year economic performance than the change
in operating income because, combined with information on capital
spending plans, it is more reliable. Changes in amortization and
depreciation have no impact on economic performance. Depreciation is
a function of capital spending. Capital spending is important and is
separately disclosed.
X Banks and other lenders use EBITDA to determine the Company's
borrowing capacity.
X Financial analysts and acquirors use EBITDA, combined with capital
spending requirements, to value communications and media companies.
EBITDA should not, however, be construed as an alternative measure of the
amount of the Company's income or cash flows from operating activities as
EBITDA excludes significant costs of doing business. EBITDA excludes
divested operating units and unusual items.
(9) Includes effect of discontinued cable television operations prior to
completion of the Cable Transaction.
12
<PAGE> 13
BUSINESS
The Company is a diversified media company operating daily newspapers,
network-affiliated broadcast television stations, cable television networks and
licensing and syndication businesses.
NEWSPAPERS
The Company is the tenth largest newspaper publisher in the United States,
with 20 daily newspapers concentrated in growth markets across the Southeast,
Southwest, Rocky Mountains and West Coast. The Company's daily newspaper
circulation is approximately 1.4 million daily and 1.6 million Sunday.
In October 1997 the Company acquired the newspaper and broadcast operations
of Harte-Hanks Communications ("Harte-Hanks") for approximately $790 million in
cash. The newspaper operations acquired from Harte-Hanks include daily
newspapers in Abilene, Corpus Christi, Plano, San Angelo and Wichita Falls,
Texas, and a daily newspaper in Anderson, South Carolina. The Company
immediately exchanged the Harte-Hanks broadcast operations for an approximate
56% controlling interest in Food Network and $75 million in cash. In August 1997
the Company traded its daily newspapers in Monterey and San Luis Obispo,
California, for the daily newspaper in Boulder, Colorado. The Company acquired
the Vero Beach, Florida, daily newspaper in May 1996 for approximately $120
million in cash.
<TABLE>
<CAPTION>
NEWSPAPER LOCATION DAILY(1) SUNDAY(1)
--------- -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Rocky Mountain News.............................. Denver, CO 325.3 435.0
The Commercial Appeal............................ Memphis, TN 183.0 254.0
The Knoxville News-Sentinel...................... Knoxville, TN 124.9 168.1
Ventura County Star.............................. Ventura, CA 95.0 103.0
The Cincinnati Post(2)(3)(4)..................... Cincinnati, OH 73.9 --
Corpus Christi Caller-Times...................... Corpus Christi, TX 68.8 90.6
The Evansville Courier(2)........................ Evansville, IN 60.3 108.0
Naples Daily News................................ Naples, FL 50.0 64.2
Anderson Independent-Mail........................ Anderson, SC 40.8 47.0
Abilene Reporter-News............................ Abilene, TX 40.4 50.4
The Sun.......................................... Bremerton, WA 38.2 40.8
Times Record News................................ Wichita Falls, TX 37.9 43.9
The Stuart News.................................. Stuart, FL 36.1 45.8
Daily Camera..................................... Boulder, CO 36.0 42.8
Redding Record Searchlight....................... Redding, CA 35.3 38.2
Vero Beach Press Journal......................... Vero Beach, FL 32.1 35.8
Standard-Times................................... San Angelo, TX 31.6 37.8
Birmingham Post-Herald(2)(4)..................... Birmingham, AL 24.7 --
The Albuquerque Tribune(2)(4).................... Albuquerque, NM 24.3 --
Plano Star Courier............................... Plano, TX 10.9 12.6
------- -------
Total.......................................... 1,369.5 1,618.0
======= =======
</TABLE>
- ---------------
(1) Based on Audit Bureau of Circulation Publisher's Statements for the
six-months ended March 31, 1998, except for the Florida newspapers, which
are for the twelve months ended March 31, 1998, and the Plano Star Courier,
which is for the six-months ended September 30, 1997.
(2) This newspaper is published under a joint operating agency with another
newspaper in its market. See "Business-Newspapers-Joint Operating Agencies."
(3) Includes circulation of The Kentucky Post.
(4) Does not publish on Sunday.
13
<PAGE> 14
The Company's newspaper operating revenues, excluding divested newspaper
operations, were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ----------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Newspaper advertising:
Local.............................. $ 65,024 $ 51,462 $221,199 $192,563 $185,821
Classified......................... 65,104 47,828 214,912 184,629 170,058
National........................... 6,369 5,447 23,056 19,384 16,480
Preprint and other................. 21,735 15,311 73,268 64,538 65,585
-------- -------- -------- -------- --------
Total advertising............. $158,232 $120,048 $532,435 $461,114 $437,944
-------- -------- -------- -------- --------
Circulation........................... 40,541 31,518 129,612 121,365 117,288
JOA distributions..................... 10,816 10,901 47,052 39,341 39,476
Other................................. 5,537 2,592 14,689 8,669 7,399
-------- -------- -------- -------- --------
Total......................... $215,126 $165,059 $723,788 $630,489 $602,107
======== ======== ======== ======== ========
</TABLE>
Advertising and Circulation. Substantially all of the Company's newspaper
publishing revenues are derived from advertising and circulation. Advertising
rates and revenues vary among the Company's newspapers depending on circulation,
demographics, type of advertising, local market conditions and competition.
Advertising revenues are derived from: (i) "run-of-paper" advertisements
included in each copy of a newspaper edition, (ii) "zoned" editions that feature
sections with stories and advertisements intended for limited areas of
distribution, (iii) "preprinted" advertisements that are inserted into
newspapers, and (iv) "shoppers" that have little or no news content and contain
primarily advertising run in the regular edition of the newspaper.
Run-of-paper advertisements are further broken down among "local",
"classified" and "national" advertising. Local refers to advertising that is not
in the classified advertising section and is purchased by in-market advertisers.
Classified refers to advertising in the section of the newspaper that is grouped
by type of advertising, e.g., automotive and help wanted. National refers to
advertising purchased by businesses that operate beyond the local market and
that purchase advertising from many newspapers, primarily through advertising
agencies. A given volume of run-of-paper advertisements is generally more
profitable to the Company than the same volume of preprinted advertisements.
Advertising revenues vary throughout the year, with the first and third
quarters generally having lower revenues than the second and fourth quarters.
Advertising rates and volume are highest on Sundays, primarily because
circulation and readership are greatest on Sundays.
Joint Operating Agencies. Four of the Company's daily metropolitan
newspapers operate under joint operating agencies ("JOAs"). Under a JOA,
newspapers in the same market share printing facilities and certain other
facilities and combine advertising and circulation sales efforts in order to
reduce aggregate expenses and take advantage of economies of scale, thereby
allowing both newspapers to continue to publish in that market. Each newspaper
maintains an independent editorial department.
The Newspaper Preservation Act of 1970 ("NPA") provides a limited exemption
from antitrust laws, generally permitting the continuance of JOAs in existence
prior to the enactment of the NPA and the formation, under certain
circumstances, of new JOAs between newspapers. Except for the Company's JOA in
Cincinnati, Ohio, all of the Company's JOAs were entered into prior to the
enactment of the NPA. From time to time the legality of the pre-NPA JOAs has
been challenged on antitrust grounds, but no such challenge has yet succeeded in
the courts.
The Evansville JOA expires at the end of 1998 and the remaining three
expire between 2007 and 2022. The JOAs generally provide for automatic renewal
terms of ten years unless an advance notice of termination ranging from two to
five years is given by either party. The Company has notified the other JOA
party in Evansville of its intent to terminate that JOA. Management believes
that termination of the Evansville JOA will enhance the Evansville Courier's
profitability.
14
<PAGE> 15
The table below provides certain information about the Company's JOAs.
<TABLE>
<CAPTION>
YEAR JOA YEAR JOA
NEWSPAPER PUBLISHER OF OTHER NEWSPAPER BEGAN EXPIRES
- -------------------------------- ---------------------------- -------- -----------
<S> <C> <C> <C>
Managed by the Company
The Evansville Courier........ Hartmann Publications 1938 1998
Managed by Other Publisher
The Albuquerque Tribune....... Journal Publishing Company 1933 2022
Birmingham Post-Herald........ Newhouse Newspapers 1950 2015
The Cincinnati Post........... Gannett Co., Inc. 1977 2007
</TABLE>
Scripps Howard News Service. From its Washington bureau, the Company
operates the Scripps Howard News Service, a supplemental wire service covering
stories in the nation's capital, other parts of the United States and abroad.
While the revenue for this service is not significant, the Company believes its
image is enhanced by the wide distribution of the Scripps Howard News Service.
Material and Labor Costs. The Company purchases newsprint from various
suppliers, many of which are Canadian. Management believes that the Company's
sources of supply of newsprint are adequate for its anticipated needs. Newsprint
and ink costs accounted for approximately 22% of total operating expenses of the
Company's newspaper operations for the three months ended March 31, 1998.
Newsprint prices have fluctuated widely in recent years. Newsprint prices
generally declined from 1992 through 1993, but began rising in the first quarter
of 1994 from approximately $420 per metric tonne to $745 by the first quarter of
1996. Newsprint prices declined from that level to approximately $500 per metric
tonne by March 1997 before increasing to the current price of $585 per tonne. If
the price remains at its current level, newsprint costs in 1998 are expected to
be approximately 30% higher in the second quarter and 25% higher in the second
half than during the comparable periods of 1997.
Labor costs accounted for approximately 42% of total operating expenses of
the Company's newspaper operations for the three months ended March 31, 1998. A
substantial number of the Company's newspaper employees are represented by labor
unions. See "Business--Employees."
Production. The Company's daily newspapers are printed by offset or
flexographic presses and use computer systems for writing, editing, composing
and producing the printing plates used in each edition.
Competition. The Company's newspapers compete for advertising revenues
primarily with other local media, including other local newspapers, television
and radio stations, cable television, telephone directories and direct mail.
Competition for advertising revenues is based upon audience size and
demographics, price and effectiveness. Changes in technology and new media, such
as electronic publications, may create additional competitors for classified
advertising revenue. Most of the Company's newspapers publish electronic
versions of the newspaper on the Internet. Newspapers compete with all other
information and entertainment media for consumers' discretionary time. All of
the Company's newspaper markets are highly competitive, particularly Denver, the
largest market in which the Company publishes a newspaper.
BROADCAST TELEVISION
The Company owns and operates nine network-affiliated broadcast television
stations, eight of which are located in one of the 50 largest television
markets. Six stations are ABC affiliates and three are NBC affiliates. In
addition to broadcasting network programming, the Company's television stations
focus on producing quality
15
<PAGE> 16
local news programming. The following table sets forth certain information about
the Company's television stations and the markets in which they operate.
<TABLE>
<CAPTION>
YEAR RANK OF
RANK OF CALL JOINED THE NETWORK STATION IN STATIONS IN
STATION AND MARKET MARKET(1) LETTERS COMPANY AFFILIATION(2) MARKET(3) MARKET(3)
------------------ --------- ------- ---------- -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Detroit, MI 9 WXYZ 1986 ABC 2 6
Cleveland, OH 13 WEWS 1947 ABC 2 11
Tampa, FL 15 WFTS 1986 ABC 4 10
Phoenix, AZ 17 KNXV 1985 ABC 4 11
Baltimore, MD 23 WMAR 1991 ABC 3 6
Cincinnati, OH 30 WCPO 1949 ABC 1 6
Kansas City, MO 31 KSHB 1977 NBC 4 8
W. Palm Beach, FL 43 WPTV 1961 NBC 1 7
Tulsa, OK 58 KJRH 1971 NBC 3 8
<CAPTION>
YEAR
FCC LICENSE
STATION AND MARKET EXPIRES
------------------ -----------
<S> <C>
Detroit, MI 2005
Cleveland, OH 2005
Tampa, FL 2005
Phoenix, AZ 1998(4)
Baltimore, MD 2004
Cincinnati, OH 2005
Kansas City, MO 2006
W. Palm Beach, FL 2005
Tulsa, OK 1998(5)
</TABLE>
- ---------------
(1) Based on data made available by the A.C. Nielsen Co. ("Nielsen") survey for
the November 1997 period. Rank of Market represents the relative size of the
designated television market compared to the 211 generally recognized
geographic market areas in the United States based on Nielsen estimates.
(2) All of the network affiliation agreements for the Company's stations expire
in 2004, except for the Baltimore and Cincinnati stations which expire in
2005 and 2006, respectively.
(3) Rank of Station in Market is determined on the basis of total viewing
households tuned to a specific station from 6:00 a.m. to 2:00 a.m. each day
compared to other stations in the designated area. Stations in Market does
not include public broadcasting stations, satellite stations, or translators
which rebroadcast signals from distant stations. Source: November 1997
Nielsen surveys.
(4) A license renewal application is due to be filed with the FCC on or before
June 1, 1998.
(5) A license renewal application was filed with the FCC on January 30, 1998,
and is pending.
The Company's broadcast television operating revenues were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ------------------------------
1998 1997 1997 1996 1995
-------- -------- -------- -------- --------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Local Advertising......................... $39,656 $38,424 $171,211 $159,412 $150,489
National Advertising...................... 30,082 29,457 139,322 127,172 125,476
Political Advertising..................... 330 89 2,106 19,505 3,207
Network compensation...................... 3,952 3,951 15,601 14,348 13,510
Other..................................... 795 775 2,976 3,030 2,546
------- ------- -------- -------- --------
Total................................... $74,815 $72,696 $331,216 $323,467 $295,228
======= ======= ======== ======== ========
</TABLE>
Advertising. The Company's television operating revenues are derived
primarily from the sale of time to businesses for commercial messages that
appear during entertainment and news programming. Local and national advertising
refer to time purchased by local, regional and national businesses; political
refers to time purchased for advertising intended to influence voting.
Automobile advertising accounts for approximately one-fourth of the Company's
local and national advertising revenues.
The first and third quarters of each year generally have lower advertising
revenues than the second and fourth quarters. The Company's television stations
have benefited from increasing political advertising in even-numbered years when
congressional and presidential elections occur, making it more difficult to
achieve year-over-year increases in operating results in odd-numbered years.
Network Affiliation and Programming. The Company's television stations are
affiliated with national television networks that offer a variety of programs to
affiliated stations. The Company's stations are compensated for carrying network
programming and have the right of first refusal before such programming may be
offered to other television stations in the same market.
In addition to network programs, the Company's television stations
broadcast locally produced programs, syndicated programs, sports events, movies
and public service programs. News is the focus of the Company's locally produced
programming. Advertising during local news programs accounts for more than 30%
of broadcast television revenues.
16
<PAGE> 17
Digital Television. In accordance with policies and schedules set out by
the Federal Communications Commission (the "FCC"), some of the Company's
broadcast television stations are beginning the conversion from analog to
digital transmission technology. Digital technology offers the potential for
much higher quality pictures and sound, but requires the acquisition of new
transmission equipment by the Company. Consumers will also be required to
purchase new television receivers in order to receive this higher picture
quality and sound. The FCC has authorized existing broadcasters to commence
digital operations on newly allocated television channels, and, for a multi-year
conversion period (currently ending in 2006), broadcasters will be expected to
transmit television signals over both sets of frequencies. Following such
conversion period, broadcasters will be required under current FCC rules (which
are subject to reconsideration) to relinquish their analog channels. The
Company's ABC affiliate in Detroit is preparing to be among the first stations
to begin digital transmission.
Competition. The Company's television stations compete for advertising
revenues primarily with other local media, including other television stations,
radio stations, cable television, newspapers, telephone directories and direct
mail. Competition for advertising revenues is based upon the audience size and
demographics, price and effectiveness. Television stations compete for
consumers' discretionary time with all other information and entertainment
media. Continuing technological advances will improve the capability of
alternative service providers such as traditional cable, "wireless" cable and
direct broadcast satellite television to offer video services in competition
with broadcast television. The degree of competition is expected to increase.
Technological advances in interactive media services, including Internet
services, will increase these competitive pressures.
Federal Regulation of Broadcasting. Television broadcasting is subject to
the jurisdiction of the FCC pursuant to the Communications Act of 1934, as
amended (the "Communications Act"). The Communications Act prohibits the
operation of television broadcast stations except in accordance with a license
issued by the FCC and empowers the FCC to revoke, modify and renew broadcasting
licenses, approve or disapprove the assignment of any broadcast license or the
transfer of control of any company holding such licenses, determine the location
of stations, regulate the equipment used by stations and adopt and enforce
necessary regulations. The FCC extensively regulates many aspects of television
broadcasting, including without limitation the ownership of broadcast licenses
(with respect to multiple ownership rules, cross-ownership rules and foreign
ownership rules), the operations of licensees, network affiliations, frequency
use, programming, employment, and many other issues.
CATEGORY TELEVISION
Category television is a newly created division of the Company bringing
together HGTV and Food Network, two of the fastest-growing cable networks in
1997. According to the Nielsen Homevideo Index, HGTV was telecast to 40.2
million homes in March 1998, up 15.1 million from March 1997, and Food Network
was telecast to 31.7 million homes in March 1998, up 9.7 million from March
1997. Management believes the popularity of HGTV and Food Network, which
consistently rank among the favorite channels of cable television subscribers,
will enable the Company to expand distribution and attract additional
advertising revenue.
The Company believes that its category television strategy creates an
efficient marketplace by bringing together viewers and advertisers of common
interest. In addition, the Company believes these networks are catalysts for
ancillary business development, including radio programming,
business-to-business services and online computer services.
HGTV, based in Knoxville, Tennessee, was developed internally and remains
100% owned by the Company. HGTV was launched on December 31, 1994 and focuses on
home repair and remodeling, gardening, decorating and other activities
associated with the home.
The Company acquired a 56% controlling interest in Food Network in October
1997. Food Network, based in New York City, has been telecasting since December
1993 and focuses on food and nutrition.
HGTV was profitable in the first quarter of 1998, after only three full
years on the air, and management believes HGTV will be profitable for the full
year 1998. Although Food Network had cash operating losses in the first quarter
of 1998, management believes losses will diminish over the next several years as
the network grows. Any unforeseen declines in revenues from advertising for
either of these networks could diminish the potential for their profitability.
17
<PAGE> 18
The Company's category television segment also includes a 12% interest in
SportSouth, a regional sports network carried by cable systems in the
Southeastern United States.
The Company's category television operating revenues were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ---------------------------
1998 1997 1997 1996 1995
-------- -------- ------- ------- -------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Advertising.................................. $19,404 $ 5,658 $36,603 $14,888 $ 8,175
Affiliate fees............................... 8,677 3,737 19,711 6,943 3,021
Other........................................ 1,025 154 2,082 280 140
------- ------- ------- ------- -------
Total...................................... $29,106 $ 9,549 $58,396 $22,111 $11,336
======= ======= ======= ======= =======
</TABLE>
Advertising and Affiliate Fees. Category television revenues are derived
from the sale of advertising time and, if provided for in the affiliation
agreement, from affiliate fees received from cable television and other
distribution systems that carry the networks. Affiliate fees are generally based
on the number of subscribers who receive the networks. Most of Food Network's
affiliation agreements do not provide for such fees.
Programming. Both HGTV and Food Network feature 24 hours of daily
programming. Some programming is produced internally and other programming is
purchased from a variety of independent producers. Programming is transmitted
via satellite to cable television systems and to satellite dish owners.
Competition. HGTV and Food Network compete with other television networks
for distribution on cable television and direct broadcast satellite systems as
well as for advertiser support. Popularity of the programming is a primary
factor in obtaining and retaining distribution and attracting advertising
revenues. Because of limited channel capacity, cable television system operators
have been able to demand distribution payments or equity interests in cable
television programming networks in exchange for long-term agreements to
distribute the networks. In 1996 and 1997 the Company agreed to pay distribution
fees of approximately $75 million to certain cable and direct broadcast
satellite systems in exchange for long-term contracts to carry HGTV. The amount
of the incentives approximates the affiliate fee revenue HGTV expects to receive
over the lives of the contracts. In 1996 and 1997 Food Network paid
approximately $6 million in distribution fees (including $1.5 million subsequent
to its acquisition by the Company) to cable television systems in exchange for
long-term contracts that do not provide for affiliate fee revenue, and
approximately $10 million to direct broadcast satellite systems for long-term
contracts that do provide for affiliate fee revenue. Additional distribution
fees may be required to obtain carriage on additional cable television systems.
Based upon the Company's historical experience, advertising revenues are
expected to increase as distribution of the networks increases.
LICENSING AND OTHER MEDIA
The Company's licensing and other media businesses include:
- United Media -- a fully integrated, worldwide licensing and
syndication company that focuses on building brand equity around a
wide range of creative content. In addition to PEANUTS, DILBERT and
the recently added FOR BETTER OR FOR WORSE(R) comic strips and
characters, United Media is the exclusive licensor of products for
National Geographic and the Public Broadcasting System.
- Cinetel Productions -- one of the largest independent producers of
programming for cable networks, including HGTV and Food Network.
Cinetel, based in Knoxville, focuses on nonfiction programming.
- Yellow Pages-USA -- an independent telephone directory publisher
launched in August 1996. This venture (60% owned) distributes
directories in three markets.
- Scripps Ventures -- an internally managed $50 million venture fund
launched in June 1996. Scripps Ventures is designed to discover
emerging media and education franchises.
The Company expects to sell Scripps Howard Productions ("SHP"), its Los
Angeles-based fiction television production operation, in 1998. The operations
of SHP are not material to the Company.
18
<PAGE> 19
The Company's licensing and other media operating revenues, excluding SHP,
were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ---------------------------
1998 1997 1997 1996 1995
-------- -------- ------- ------- -------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Licensing ................................... $14,584 $16,224 $56,813 $53,672 $49,366
Newspaper feature distribution............... 5,663 4,935 20,919 20,695 18,915
Advertising.................................. 5,691 428 3,878 828 559
Program production........................... 2,786 1,817 11,145 10,710 7,167
Other........................................ 418 604 1,898 1,162 922
------- ------- ------- ------- -------
Total...................................... $29,142 $24,008 $94,653 $87,067 $76,929
======= ======= ======= ======= =======
</TABLE>
United Media owns and licenses worldwide copyrights relating to PEANUTS,
DILBERT and other character properties for use on numerous products, including
plush toys, greeting cards and apparel, for promotional purposes and for exhibit
on television, video cassettes and other media. PEANUTS and DILBERT provided
more than 80% and 15%, respectively, of the Company's licensing revenues in the
first quarter of 1998. Approximately 70% of PEANUTS licensing revenues are
earned in international markets, with the Japanese market providing
approximately two-thirds of international revenue.
Merchandise, literary and exhibition licensing revenues are generally a
negotiated percentage of the licensee's sales. The Company generally receives a
fixed fee for the use of its copyrights for promotional and advertising
purposes. The Company generally pays a percentage of its gross syndication and
licensing royalties to the creators of these properties.
Cinetel Productions develops and produces its programs both internally and
in collaboration with a number of independent writers, producers and creative
teams under production arrangements. Generally, Cinetel licenses the initial
telecast rights for programs prior to commencing production. Initial license
fees commonly approximate the production costs of a program. Additional license
fees may be pursued from foreign, syndicated television, cable television and
home video markets. The ultimate profitability of the Company's programs is
dependent upon public taste, which is unpredictable and subject to change.
Competition. The Company's newspaper-feature distribution operations
compete for a limited amount of newspaper space with other distributors of news
columns, comics and other features. Competition is primarily based on price and
popularity of the features. Popularity of licensed characters is a primary
factor in obtaining and renewing merchandise and promotional licenses.
The Company's program production operations compete with all forms of
entertainment. In addition to competing for market share with other
entertainment companies, the Company also competes to obtain creative talent and
story properties. A significant number of other companies produce or distribute
programs. Competition is primarily based on price, quality of the programming
and public taste.
EMPLOYEES
As of March 31, 1998, the Company had approximately 8,100 full-time
employees, including 6,000 in newspapers, 1,500 in broadcast television, 300 in
category television and 200 in licensing and other media. Various labor unions
represent approximately 2,800 employees, primarily in newspapers. The present
operations of the Company have not experienced any work stoppages since March
1985. The Company considers its relationship with employees to be generally
satisfactory.
19
<PAGE> 20
MANAGEMENT
The Board of Directors of the Company consists of ten members. All
directors hold office until the next annual meeting of shareholders of the
Company or until the election of their respective successors. Officers of the
Company serve at the pleasure of the Board.
The following table sets forth certain information with respect to the
directors and certain key executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION AND OFFICE WITH THE COMPANY
---- --- ------------------------------------
<S> <C> <C>
Lawrence A. Leser 62 Chairman of the Board
William R. Burleigh 62 President, Chief Executive Officer and Director
Daniel J. Castellini 58 Senior Vice President/Finance and Administration
Paul F. (Frank)
Gardner 55 Senior Vice President/Television
Alan M. Horton 54 Senior Vice President/Newspapers
Craig C. Standen 55 Senior Vice President/Corporate Development
John H. Burlingame 64 Director
Daniel J. Meyer 61 Director
Nicholas B. Paumgarten 52 Director
Charles E. Scripps 78 Director
Paul K. Scripps 52 Director
Edward W. Scripps 39 Director
Ronald W. Tysoe 44 Director
Julie A. Wrigley 49 Director
</TABLE>
Lawrence A. Leser has been the Chairman of the Company since August 1994
and was Chief Executive Officer from July 1985 to May 1996.
William R. Burleigh has been the Chief Executive Officer of the Company
since May 1996 and President of the Company since August 1994. Mr. Burleigh was
the Chief Operating Officer of the Company from May 1994 to May 1996, Executive
Vice President from March 1990 to May 1994 and Senior Vice President/Newspapers
and Publishing from September 1986 to March 1990.
Daniel J. Castellini has been the Senior Vice President/Finance and
Administration of the Company since 1986.
Paul F. (Frank) Gardner has been the Senior Vice President/Television of
the Company since April 1993 and was the Senior Vice President/News Programming,
Fox Broadcasting Company from 1991 to 1993.
Alan M. Horton has been the Senior Vice President/Newspapers of the Company
since May 1994 and was Vice President/Operations, Newspapers of the Company from
1991 to 1994.
Craig C. Standen has been Senior Vice President/Corporate Development of
the Company since August 1994 and was Vice President/Marketing -- Advertising,
Newspapers from 1990 to 1994.
John H. Burlingame has been a Senior Partner of Baker & Hostetler LLP (a
law firm) since January 1, 1998, and was a Partner from June 1, 1997 through
December 31, 1997 and Executive Partner from 1982 through June 1, 1997 of such
firm. Mr. Burlingame is a trustee of the Scripps Trust.
Daniel J. Meyer has been the President of Cincinnati Milacron Inc. (a
manufacturer of metal working and plastics processing machinery and systems)
since January 1, 1998, Chairman since January 1, 1991 and Chief Executive
Officer of Cincinnati Milacron Inc. since April 24, 1990. Mr. Meyer is also a
director of Star Banc Corp. and Hubbell Incorporated (a manufacturer of wiring
and lighting devices).
Nicholas B. Paumgarten has been a Managing Director of J.P. Morgan & Co.
Incorporated (an investment banking firm) since February 10, 1992.
20
<PAGE> 21
Charles E. Scripps has been Chairman of the Executive Committee of the
Company since August 1994 and served as the Chairman of the Board of Directors
of the Company from 1953 to August 1994. Mr. Scripps is a grandson of Edward W.
Scripps, the founder of the Company.
Paul K. Scripps has been the Vice President/Newspapers of the Company since
November 1997 and was Chairman of a subsidiary of the Company from December 1989
to June 1997. Mr. Scripps is a second cousin of Charles E. Scripps. Mr. Scripps
serves as a director of the Company pursuant to an agreement between the Scripps
Trust and John P. Scripps. See "Certain Transactions--John P. Scripps
Newspapers."
Edward W. Scripps was the news Director at KJRH-TV, a division of a
subsidiary of the Company from February 1983 through September 1993. Mr. Scripps
is a nephew of Charles E. Scripps.
Ronald W. Tysoe is a director of Federated Department Stores, Inc., and has
been its Vice Chairman, Finance and Real Estate since December 1997. Mr. Tysoe
also served as Vice Chairman and Chief Financial Officer of Federated Department
Stores, Inc. from April 1990 to December 1997.
Julie A. Wrigley has been the Chairman and Chief Executive Officer of
Wrigley Management Inc. since 1995, Assistant to the President/CEO of Wm.
Wrigley Jr. Company since 1994 and Investment Advisor & Manager of Wrigley
Family Trusts and Estates since 1977. Mrs. Wrigley was a director of Associated
Bank, Chicago from 1988 to 1996.
21
<PAGE> 22
SELLING SHAREHOLDERS
The Shares offered hereby are being sold by the Scripps Trust and the
Howard Trust. Certain information regarding the Selling Shareholders which has
been provided to the Company by them appears below.
THE EDWARD W. SCRIPPS TRUST
3,055,556 of the Shares offered hereby are being sold by the Scripps Trust.
The Company has been advised that the Scripps Trust is selling the Shares in
order to diversify the assets of the Scripps Trust. The Trustees of the Scripps
Trust are Charles E. Scripps, Robert P. Scripps, Jr. and John H. Burlingame.
Each of the Trustees other than Robert P. Scripps is a director of the Company,
and Charles E. Scripps is Chairman of the Executive Committee of the Board of
Directors of the Company. The Trustees have the power to vote and dispose of the
shares of capital stock of the Company held by the Scripps Trust. Charles E.
Scripps and Robert P. Scripps, Jr. have a life income interest in the Scripps
Trust. John H. Burlingame has no economic interest in the assets held by the
Scripps Trust.
The agreement establishing the Scripps Trust (the "Trust Agreement") is
dated November 23, 1922. Under the Trust Agreement, the Scripps Trust must
retain voting stock sufficient to ensure control of the Company by the Scripps
Trust until the final distribution of the Scripps Trust estate unless earlier
stock dispositions are necessary for the purpose of preventing loss or damage to
the Scripps Trust estate. Under a probate court ruling obtained in 1998, the
Scripps Trust is not required to hold a majority of the outstanding Class A
Common Shares or to hold a majority of the Company's total number of outstanding
shares (Class A Common Shares and Common Voting Shares combined) to ensure
control of the Company.
The Scripps Trust will terminate upon the death of the last to survive of
four persons specified by the Trust Agreement, the youngest of whom is 74 years
of age. Upon the termination of the Scripps Trust, substantially all of its
assets (including all the shares of capital stock of the Company held by the
Scripps Trust) will be distributed to the grandchildren of Robert Paine Scripps
(a son of Edward W. Scripps), of whom there are 28. Twenty-seven of these
grandchildren have entered into an agreement among themselves, other cousins and
the Company which will restrict transfer and govern voting of Common Voting
Shares to be held by them upon termination of the Scripps Trust and distribution
of the Scripps Trust estate. See "Certain Transactions--Scripps Family
Agreement." The Company has been advised that no tax will be payable on the
assets of the Scripps Trust upon distribution thereof to the beneficiaries.
As of April 30, 1998, the Scripps Trust owned 32,610,000, or 53.0%, of the
outstanding Class A Common Shares and 16,040,000, or 83.5%, of the outstanding
Common Voting Shares, such shares together being 60.2% of the outstanding
capital stock of the Company. Following the sale of its portion of the Shares
and assuming that the Underwriters' over-allotment options are not exercised,
the Scripps Trust will own 29,554,444, or 48.0%, of the outstanding Class A
Common Shares and 16,040,000, or 83.5%, of the outstanding Common Voting Shares,
which together would constitute 56.4% of the outstanding capital stock of the
Company. See "Security Ownership of Certain Beneficial Owners and Selling
Shareholders."
Prior to the Offerings, as holder of a majority of the outstanding Class A
Common Shares and the outstanding Common Voting Shares, the Scripps Trust is
able to elect all of the Company's directors. After the Offerings, the Scripps
Trust will continue to own a majority of the Common Voting Shares, which will
enable it to elect two-thirds of the Company's directors, and will own
approximately 48% of the outstanding Class A Common Shares, which may, as a
practical matter, enable it to continue to elect the remainder of the Company's
directors. Nominations of persons for election by either class of shares of the
Company to the Board of Directors are made, and will continue to be made after
the Offerings, by the vote of a majority of all directors then in office,
regardless of the class of shares entitled to elect them.
So long as the Scripps Trust owns a majority of the Common Voting Shares,
it will be able to, under most circumstances, amend the Company's Articles of
Incorporation and effect any fundamental corporate transaction without the
approval of any other of the Company's shareholders and will be able to defeat
any unsolicited attempt to acquire control of the Company. The concentration of
voting power in the Scripps Trust and the limited voting rights of holders of
Class A Common Shares may have the effect of precluding holders of shares of
22
<PAGE> 23
capital stock of the Company from receiving any premium above market price for
their shares which may be offered in connection with any attempt to acquire
control of the Company.
JACK R. HOWARD TRUST
2,444,444 of the Shares offered hereby are being sold by the Howard Trust.
The Howard Trust is an irrevocable trust that was established in 1981 by Jack R.
Howard for his benefit and the benefit of his wife, both of whom are now
deceased. The sole trustee of the Howard Trust is The Chase Manhattan Bank,
which has the power to vote and dispose of the shares of capital stock of the
Company held by it under the Howard Trust. The Company has been advised that the
Howard Trust is selling the Shares in order to pay estate taxes and to diversify
assets of the Trust.
As of April 30, 1998, the Howard Trust owned 3,327,385, or 5.4%, of the
outstanding Class A Common Shares and 170,000, or .9%, of the outstanding Common
Voting Shares, such shares together being 4.3% of the outstanding capital stock
of the Company. Following the sale of its portion of the Shares and assuming
that the Underwriters' over-allotment options are not exercised, the Howard
Trust will own 882,941, or 1.4%, of the outstanding Class A Common Shares and
170,000, or .9%, of the outstanding Common Voting Shares, which together would
constitute 1.3% of the outstanding capital stock of the Company. See "Security
Ownership of Certain Beneficial Owners and Selling Shareholders."
23
<PAGE> 24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND SELLING SHAREHOLDERS
The following table sets forth certain information with respect to persons
known to management to be the beneficial owners, as of April 30, 1998, of more
than five percent of the Company's outstanding Class A Common Shares or Common
Voting Shares. Unless otherwise indicated, the persons named in the table have
sole voting and investment power with respect to all shares shown therein as
being beneficially owned by them.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP PRIOR TO THE OFFERINGS
------------------------------------------- CLASS A
CLASS A COMMON COMMON
NAME AND ADDRESS COMMON VOTING SHARES TO
OF BENEFICIAL OWNER SHARES PERCENT SHARES PERCENT BE SOLD (1)
- --------------------------- ---------- ------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C>
The Edward W. Scripps Trust 32,610,000 53.0% 16,040,000 83.5% 3,055,556
312 Walnut Street
P.O. Box 5380
Cincinnati,Ohio
The Jack R. Howard Trust 3,327,385 5.4 170,000 .9 2,444,444
Chase Manhattan Bank,
Trustee (2)
c/o George Rowe, Esq.
Fulton, Rowe, Hart & Coon
1 Rockefeller Plaza
Suite 301
New York, NY 10020
Paul K. Scripps and 600 -- 1,616,113 8.4 --
John P. Scripps Trust (3)
625 Broadway, Suite 625
San Diego, California
Franklin Resources, Inc. 3,737,800 6.1 -- -- --
(4)
777 Mariners Island Blvd.
San Mateo, California
<CAPTION>
BENEFICIAL OWNERSHIP AFTER THE OFFERINGS
------------------------------------------
CLASS A COMMON
NAME AND ADDRESS COMMON VOTING
OF BENEFICIAL OWNER SHARES PERCENT SHARES PERCENT
- --------------------------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
The Edward W. Scripps Trust 29,554,444 48.0% 16,040,000 83.5%
312 Walnut Street
P.O. Box 5380
Cincinnati,Ohio
The Jack R. Howard Trust 882,941 1.4 170,000 .9
Chase Manhattan Bank,
Trustee (2)
c/o George Rowe, Esq.
Fulton, Rowe, Hart & Coon
1 Rockefeller Plaza
Suite 301
New York, NY 10020
Paul K. Scripps and 600 -- 1,616,113 8.4
John P. Scripps Trust (3)
625 Broadway, Suite 625
San Diego, California
Franklin Resources, Inc. 3,737,800 6.1 -- --
(4)
777 Mariners Island Blvd.
San Mateo, California
</TABLE>
- ---------------
(1) Excludes 825,000 Shares that may be purchased by the Underwriters to cover
over-allotments, if any.
(2) Chase Manhattan Bank (the "Bank") also serves as trustee of several trusts,
including trusts established for the benefit of Jack R. Howard's sister, and
as executor of the Estate of Mr. Howard's wife. In these capacities, the
Bank is the beneficial owner of 249,885 Class A Common Shares and 1,017,800
Common Voting Shares.
(3) The shares listed for Mr. Paul K. Scripps include 119,520 Common Voting
Shares and 400 Class A Common Shares held in various trusts for the benefit
of certain relatives of Paul K. Scripps and 100 Class A Common Shares owned
by his wife. Mr. Scripps is a trustee of the aforesaid trusts. Mr. Scripps
disclaims beneficial ownership of the shares held in such trusts and the
shares owned by his wife. The shares listed also include 1,445,453 Common
Voting Shares held by five trusts of which Mr. Scripps is a trustee. Mr.
Scripps is the sole beneficiary of one of these trusts, holding 349,018
Common Voting Shares. He disclaims beneficial ownership of the shares held
in the other four trusts. Mr. Scripps is a director of the Company.
(4) Franklin Resources, Inc. has filed a Schedule 13G with the Securities and
Exchange Commission with respect to the Company's Class A Common Shares. The
information in the table is based on the information contained in such
filing as of December 31, 1997.
24
<PAGE> 25
DESCRIPTION OF CAPITAL STOCK
The following summary description of the Company's capital stock does not
purport to be complete and is qualified entirely by reference to the Articles of
Incorporation and Code of Regulations of the Company, which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus
forms a part.
The authorized capital stock of the Company consists of 120 million Class A
Common Shares, 30 million Common Voting Shares and 25 million Preferred Shares.
As of April 30, 1998, 61,581,488 Class A Common Shares and 19,218,913 Common
Voting Shares were outstanding. No Preferred Shares are outstanding. Except in
connection with stock splits, stock dividends or similar transactions, the
Articles of Incorporation of the Company prohibit the issuance of additional
Common Voting Shares.
CLASS A COMMON SHARES AND COMMON VOTING SHARES
Voting Rights. Holders of Class A Common Shares are entitled to elect the
greater of three or one-third of the directors of the Company (or the nearest
smaller whole number if one-third of the entire Board is not a whole number),
except directors, if any, to be elected by holders of Preferred Shares or any
series thereof. Holders of Common Voting Shares are entitled to elect all
remaining directors and to vote on all other matters. Nomination of persons for
election by either class of shares to the Board are made by the vote of a
majority of all directors then in office, regardless of the class of shares
entitled to elect them. Holders of a majority of the outstanding Common Voting
Shares have the right to increase or decrease the number of authorized and
unissued Class A Common Shares and Common Voting Shares, but not below the
number of shares thereof then outstanding. The Company's Class A Common Shares
and Common Voting Shares do not have cumulative voting rights.
Holders of Class A Common Shares are not entitled to vote on any other
matters except as required by the Ohio General Corporation Law ("Ohio Law").
Under Ohio Law, an amendment to a corporation's articles of incorporation that
purports to do any of the following would require the approval of the holders of
each class of capital stock affected: (i) increase or decrease the par value of
the issued shares of such class (or of any other class of capital stock of the
corporation if the amendment would reduce or eliminate the stated capital of the
corporation), (ii) change issued shares of a class into a lesser number of
shares or into the same or a different number of shares of any other class
theretofore or then authorized (or so change any other class of capital stock of
the corporation if the amendment would reduce or eliminate the stated capital of
the corporation), (iii) change the express terms of, or add express terms to,
the shares of a class in any manner substantially prejudicial to the holders of
such class, (iv) change the express terms of issued shares of any class senior
to the particular class in any manner substantially prejudicial to the holders
of such junior class, (v) authorize shares of another class that are convertible
into, or authorize the conversion of shares of another class into, such class,
or authorize the directors to fix or alter conversion rights of shares of
another class that are convertible into such class, (vi) provide that the stated
capital of the corporation shall be reduced or eliminated as a result of an
amendment described in clause (i) or (ii) above, or provide, in the case of an
amendment described in clause (v) above, that the stated capital of the
corporation shall be reduced or eliminated upon the exercise of such conversion
rights, (vii) change substantially the purpose of the corporation, or provide
that thereafter an amendment to the corporation's articles of incorporation may
be adopted that changes substantially the purposes of the corporation, or (viii)
change the corporation into a nonprofit corporation.
The holders of Common Voting Shares have the power to defeat any attempt to
acquire control of the Company with a view to effecting a merger, sale of assets
or similar transaction even though such a change in control may be favored by
shareholders holding substantially more than a majority of the Company's
outstanding equity. This may have the effect of precluding holders of shares in
the Company from receiving any premium above market price for their shares which
may be offered in connection with any such attempt to acquire control.
The Company's voting structure, which is similar to voting structures
adopted by a number of other media companies, is designed to promote the
continued independence and integrity of the Company's media operations under the
control of the holders of Common Voting Shares while at the same time providing
for equity ownership in the Company by a broader group of shareholders through
the means of a class of publicly traded common shares. This structure may render
more difficult certain unsolicited or hostile attempts to take over the Company
25
<PAGE> 26
which could disrupt the Company, divert the attention of its directors, officers
and employees and adversely affect the independence and quality of its media
operations.
Dividend Rights. Each Class A Common Share is entitled to dividends if, as
and when dividends are declared by the Board of Directors of the Company.
Dividends must be paid on the Class A Common Shares and Common Voting Shares at
any time that dividends are paid on either. Any dividend declared and payable in
cash, capital stock of the Company (other than Class A Common Shares or Common
Voting Shares) or other property must be paid equally, share for share, on the
Common Voting Shares and the Class A Common Shares. Dividends and distributions
payable in Common Voting Shares may be paid only on Common Voting Shares, and
dividends and distributions payable in Class A Common Shares may be paid only on
Class A Common Shares. If a dividend or distribution payable in the Class A
Common Shares is made on Class A Common Shares, a simultaneous dividend or
distribution in Common Voting Shares must be made on the Common Voting Shares.
If a dividend or distribution payable in Common Voting Shares is made on the
Common Voting Shares, a simultaneous dividend or distribution in Class A Common
Shares must be made on the Class A Common Shares. Pursuant to any such dividend
or distribution, each Common Voting Share will receive a number of Common Voting
Shares equal to the number of Class A Common Shares payable on each Class A
Common Share. In the case of any dividend or other distribution payable in stock
of any corporation which just prior to the time of the distribution is a wholly
owned subsidiary of the Company and which possesses authority to issue class A
common shares and common voting shares with voting characteristics identical to
those of the Company's Class A Common Shares and Common Voting Shares,
respectively, including a distribution pursuant to a stock dividend, a stock
split or division of stock or a spin-off or split-up reorganization of the
Company, only class A common shares of such subsidiary will be distributed with
respect to the Company's Class A Common Shares and only common voting shares of
such subsidiary will be distributed with respect to the Company's Common Voting
Shares.
Conversion. Each Common Voting Share is convertible at any time, at the
option of and without cost to its holder, into one Class A Common Share.
Liquidation Rights. In the event of the liquidation, dissolution or
winding up of the Company, holders of Class A Common Shares and Common Voting
Shares will be entitled to participate equally, share for share, in the assets
available for distribution.
Preemptive Rights. Holders of Class A Common Shares do not have preemptive
rights to purchase shares of such stock or shares of stock of any other class
that the Company may issue. Holders of Common Voting Shares have preemptive
rights to purchase any additional Common Voting Shares or any other stock with
or convertible into stock with general voting rights issued by the Company.
PREFERRED SHARES
No Preferred Shares are outstanding. The Board of Directors is authorized
to issue, by resolution and without any action by shareholders, up to 25 million
Preferred Shares. All Preferred Shares will be of equal rank. Dividends on
Preferred Shares will be cumulative and will have a preference to the Class A
Common Shares and Common Voting Shares. So long as any Preferred Shares are
outstanding, no dividends may be paid on, and the Company may not redeem or
retire, any common shares or other securities ranking junior to the Preferred
Shares unless all accrued and unpaid dividends on the Preferred Shares shall
have been paid. In the event of a liquidation, dissolution or winding up of the
Company, the Company's Preferred Shares are entitled to receive, before any
amounts are paid or distributed in respect of any securities junior to the
Preferred Shares, the amount fixed by the Board of Directors as a liquidation
preference, plus the amount of all accrued and unpaid dividends. The Preferred
Shares have no voting rights except as may be required by Ohio Law. See
"Description of Capital Stock--Class A Common Shares and Common Voting
Shares--Voting Rights" for those amendments to the Articles that would require a
vote of the holders of the Preferred Shares.
Except as specifically described in this section, the Board of Directors
will have the power to establish the designations, dividend rate, conversion
rights, terms of redemption, liquidation preference, sinking fund terms and all
other preferences and rights of any series of Preferred Shares. The issuance of
Preferred Shares may
26
<PAGE> 27
adversely affect certain rights of the holders of Class A Common Shares and
Common Voting Shares and may render more difficult certain unsolicited or
hostile attempts to take over the Company.
EVALUATION OF TENDER OFFERS AND SIMILAR TRANSACTIONS
The Company's Articles of Incorporation provide that the Board of
Directors, when evaluating any offer of another party to make a tender or
exchange offer for any equity security of the Company, or any proposal to merge
or consolidate the Company with another company, or to purchase or otherwise
acquire all or substantially all the properties and assets of the Company, must
give due consideration to the effect of such a transaction on the integrity,
character and quality of the Company's operations, as well as to all other
relevant factors, including the long-term and short-term interests of the
Company and its shareholders, and the social, legal and economic effects on
employees, customers, suppliers and creditors and on the communities and
geographical areas in which the Company and its subsidiaries operate or are
located, and on any of the businesses and properties of the Company or any of
its subsidiaries. This provision may have the effect of rendering more difficult
or discouraging an acquisition of the Company that is deemed undesirable by the
Board of Directors.
COMPLIANCE WITH FCC REGULATIONS
The Company's Articles of Incorporation authorize it to obtain information
from shareholders and persons seeking to have shares of the Company's capital
stock transferred to them, in order to ascertain whether ownership of, or
exercise of rights with respect to, the Company's shares by such persons would
violate federal communications laws. If any person refuses to provide such
information or the Company concludes that such ownership or exercise of such
rights would result in the violation of applicable federal communications laws,
the Company may refuse to transfer shares to such person or refuse to allow him
to exercise any rights with respect to the Company's shares if exercise thereof
would result in such a violation.
CERTAIN OHIO ANTI-TAKEOVER LAWS
Certain Ohio anti-takeover laws may have the effect of discouraging or
rendering more difficult an unsolicited acquisition of a corporation or its
capital stock to the extent the corporation is subject to such provisions. The
articles of incorporation of a corporation may provide that any one or more of
these provisions of Ohio Law will not apply to the corporation. The Articles of
Incorporation of the Company provide that none of these provisions apply to the
Company except the tender offer statute.
Business Combinations with Interested Shareholders. Chapter 1704 of the
Ohio Law applies to a broad range of business combinations between an Ohio
corporation and an "interested shareholder." Chapter 1704 is triggered by the
acquisition of 10% of the voting power of a subject Ohio corporation. The
prohibition imposed by Chapter 1704 continues indefinitely after the initial
three-year period unless the subject transaction is approved by the requisite
vote of the shareholders or satisfies statutory conditions relating to the
fairness of consideration received by shareholders who are not interested in the
subject transaction. During the initial three-year period the prohibition is
absolute absent prior approval by the board of directors of the acquisition of
voting power by which a person became an "interested shareholder" or of the
subject transaction. The Company has made Chapter 1704 inapplicable to it by so
providing in the Articles of Incorporation of the Company.
Control Share Acquisition. Section 1701.831 of the Ohio Law (the "Ohio
Control Share Acquisition Statute") provides that certain notice and
informational filings and special shareholder meeting and voting procedures must
be followed prior to consummation of a proposed "control share acquisition,"
which is defined as any acquisition of an issuer's shares which would entitle
the acquiror, immediately after such acquisition, directly or indirectly, to
exercise or direct the exercise of voting power of the issuer in the election of
directors within any of the following ranges of such voting power: (i) one-fifth
or more but less than one-third of such voting power, (ii) one-third or more but
less than a majority of such voting power, or (iii) a majority or more of such
voting power. Assuming compliance with the notice and information filings
prescribed by statute, the proposed control share acquisition may be made only
if, at a duly convened special meeting of shareholders, the acquisition is
approved by both a majority of the voting power of the issuer represented at the
meeting and a majority of the voting power remaining after excluding the
combined voting power of the intended acquiror and
27
<PAGE> 28
the directors and officers of the issuer. The Company has made the Ohio Control
Share Acquisition Statute inapplicable to it by so providing in the Articles of
Incorporation of the Company.
Ohio "Anti-Greenmail" Statute. Pursuant to Ohio Law Section 1707.043, a
public corporation formed in Ohio may recover profits that a shareholder makes
from the sale of the corporation's securities within 18 months after making a
proposal to acquire control or publicly disclosing the possibility of a proposal
to acquire control. The corporation may not, however, recover from a person who
proves either (i) that his sole purpose in making the proposal was to succeed in
acquiring control of the corporation and there were reasonable grounds to
believe that he would acquire control of the corporation or (ii) that his
purpose was not to increase any profit or decrease any loss in the stock. Also,
before the corporation may obtain any recovery, the aggregate amount of the
profit realized by such person must exceed $250,000. Any shareholder may bring
an action on behalf of the corporation if a corporation refuses to bring an
action to recover these profits. The party bringing such an action may recover
his attorneys' fees with the permission of the court having jurisdiction over
such action. The Articles of Incorporation of the Company provide that this
statute does not apply to the Company.
Tender Offer Statute. The Ohio tender offer statute (Ohio Law Section
1707.041) requires any person making a tender offer for a corporation having its
principal place of business in Ohio to comply with certain filing, disclosure
and procedural requirements. The disclosure requirements include a statement of
any plans or proposals that the offeror, upon gaining control, may have to
liquidate the subject company, sell its assets, effect a merger or consolidation
of it, establish, terminate, convert, or amend employee benefit plans, close any
plant or facility of the subject company or of any of its subsidiaries or
affiliates, or make any other major change in its business, corporate structure,
management personnel, or policies of employment.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Company's Class A Common Shares is
Fifth Third Bank, Cincinnati, Ohio.
28
<PAGE> 29
CERTAIN TRANSACTIONS
SCRIPPS FAMILY AGREEMENT
General. The Company and certain persons and trusts are parties to an
agreement (the "Scripps Family Agreement") restricting the transfer and
governing the voting of Common Voting Shares that such persons and trusts may
acquire or own at or after the termination of the Scripps Trust. Such persons
and trusts (the "Signatories") consist of certain grandchildren of Robert Paine
Scripps who are beneficiaries of the Scripps Trust, descendants of John P.
Scripps, and certain trusts of which descendants of John P. Scripps are trustees
and beneficiaries. Robert Paine Scripps and John P. Scripps were sons of the
founder of the Company.
If the Scripps Trust were to have terminated as of April 30, 1998, the
Signatories would have held in the aggregate approximately 89.2% of the
outstanding Common Voting Shares as of such date.
Once effective, the provisions restricting transfer of Common Voting Shares
under the Scripps Family Agreement will continue until twenty-one years after
the death of the last survivor of the descendants of Robert Paine Scripps and
John P. Scripps alive when the Scripps Trust terminates. The provisions of the
Scripps Family Agreement governing the voting of Common Voting Shares will be
effective for a ten year period after termination of the Scripps Trust and may
be renewed for additional ten year periods pursuant to Ohio law and certain
provisions set forth in the Scripps Family Agreement.
Transfer Restrictions. No Signatory will be able to dispose of any Common
Voting Shares (except as otherwise summarized below) without first giving other
Signatories and the Company the opportunity to purchase such shares. Signatories
will not be able to convert Common Voting Shares into Class A Common Shares
except for a limited period of time after giving other Signatories and the
Company the aforesaid opportunity to purchase and except in certain other
limited circumstances.
Signatories will be permitted to transfer Common Voting Shares to their
lineal descendants or trusts for the benefit of such descendants, or to any
trust for the benefit of the spouse of such descendant or any other person or
entity. Descendants to whom such shares are sold or transferred outright, and
trustees of trusts into which such shares are transferred, must become parties
to the Scripps Family Agreement or such shares shall be deemed to be offered for
sale pursuant to the Scripps Family Agreement. Signatories will also be
permitted to transfer Common Voting Shares by testamentary transfer to their
spouses provided such shares are converted to Class A Common Shares and to
pledge such shares as collateral security provided that the pledgee agrees to be
bound by the terms of the Scripps Family Agreement. If title to any such shares
subject to any trust is transferred to anyone other than a descendant of Robert
Paine Scripps or John P. Scripps, or if a person who is a descendant of Robert
Paine Scripps or John P. Scripps acquires outright any such shares held in trust
but is not or does not become a party to the Scripps Family Agreement, such
shares shall be deemed to be offered for sale pursuant to the Scripps Family
Agreement. Any valid transfer of Common Voting Shares made by Signatories
without compliance with the Scripps Family Agreement will result in automatic
conversion of such shares to Class A Common Shares.
Voting Provisions. The Scripps Family Agreement provides that the Company
will call a meeting of the Signatories prior to each annual or special meeting
of the shareholders of the Company held after termination of the Scripps Trust
(each such meeting hereinafter referred to as a "Required Meeting"). At each
Required Meeting, the Company will submit for decision by the Signatories, each
matter, including election of directors, that the Company will submit to its
shareholders at the annual meeting or special meeting with respect to which the
Required Meeting has been called. Each Signatory will be entitled, either in
person or by proxy, to cast one vote for each Common Voting Share owned of
record or beneficially by him on each matter brought before the meeting. Each
Signatory will be bound by the decision reached with respect to each matter
brought before such meeting, and, at the related meeting of the shareholders of
the Company, will vote his Common Voting Shares in accordance with decisions
reached at the meeting of the Signatories.
29
<PAGE> 30
JOHN P. SCRIPPS NEWSPAPERS
In connection with the merger in 1986 of the John P. Scripps Newspaper
Group ("JPSN") into a wholly owned subsidiary of the Company (the "JPSN
Merger"), the Company and the Scripps Trust entered into certain agreements
discussed below.
JPSN Board Representation Agreement. The Scripps Trust and John P. Scripps
entered into a Board Representation Agreement dated March 14, 1986 in connection
with the JPSN Merger. Under this agreement, the surviving adult children of Mr.
Scripps who are shareholders of the Company have the right to designate one
person to serve on the Company's Board of Directors so long as they continue to
own in the aggregate 25% of the sum of (i) the shares issued to them in the JPSN
Merger and (ii) the shares received by them from John P. Scripps' estate. In
this regard, the Scripps Trust has agreed to vote its Common Voting Shares in
favor of the person designated by John P. Scripps' children. Pursuant to this
agreement, Paul K. Scripps currently serves on the Company's board of directors.
The Board Representation Agreement terminates upon the earlier of the
termination of the Scripps Trust or the completion of a public offering by the
Company of Common Voting Shares.
Stockholder Agreement. The former shareholders of the JPSN, including John
P. Scripps and Paul K. Scripps, entered into a Stockholder Agreement with the
Company in connection with the JPSN Merger. This agreement restricts to certain
transferees the transfer of Common Voting Shares received by such shareholders
pursuant to the JPSN Merger. These restrictions on transfer will terminate on
the earlier of the termination of the Scripps Trust or completion of a public
offering of Common Voting Shares. Under the agreement, if a shareholder has
received a written offer to purchase 25% or more of his Common Voting Shares,
the Company has a "right of first refusal" to purchase such shares on the same
terms as the offer. On the death of any of these shareholders, the Company is
obligated to purchase from the shareholder's estate a sufficient number of the
common shares of the Company to pay federal and state estate taxes attributable
to all shares included in such estate; this obligation expires in 2006. Under
certain other circumstances, such as bankruptcy or insolvency of a shareholder,
the Company has an option to buy all common shares of the Company owned by such
shareholder. Under the agreement, shareholders owning 25% or more of the
outstanding Common Voting Shares issued pursuant to the JPSN Merger may require
the Company to register Common Voting Shares (subject to the right of first
refusal mentioned above) under the Securities Act of 1933 for sale at the
shareholders' expense in a public offering. In addition, the former shareholders
of the JPSN will be entitled, subject to certain conditions, to include Common
Voting Shares (subject to the right of first refusal) that they own in any
registered public offering of shares of the same class by the Company. The
registration rights expire three years from the date of a registered public
offering of Common Voting Shares.
30
<PAGE> 31
CERTAIN UNITED STATES FEDERAL TAX
CONSEQUENCES TO NON-U.S. SHAREHOLDERS
The following is a general discussion of certain United States Federal tax
consequences of the acquisition, ownership, and disposition of Shares by a
holder that, for United States Federal income tax purposes, is not a "United
States person" (a "Non-United States Holder"). This discussion is based upon the
United States Federal tax law now in effect, which is subject to change,
possibly retroactively. For purposes of this discussion, a "United States
person" means a citizen or resident of the United States; a corporation,
partnership, or other entity created or organized in the United States or under
the laws of the United States or of any political subdivision thereof (except to
the extent otherwise provided in United States Treasury regulations in the case
of a partnership); an estate whose income is includible in gross income for
United States Federal income tax purposes regardless of its source; a person
otherwise subject to United States Federal income tax on a net income basis in
respect of its worldwide taxable income; or a "United States Trust." A United
States Trust is any trust if, and only if, (i) a court within the United States
is able to exercise primary supervision over the administration of the trust and
(ii) one or more United States trustees have the authority to control all
substantial decisions of the trust. This discussion does not consider any
specific facts or circumstances that may apply to a particular Non-United States
Holder. Prospective investors are urged to consult their tax advisors regarding
the United States Federal tax consequences of acquiring, holding, and disposing
of Shares, as well as any tax consequences that may arise under the laws of any
foreign, state, local, or other taxing jurisdiction.
DIVIDENDS
Dividends paid to a Non-United States Holder will generally be subject to
withholding of United States Federal income tax at the rate of 30% unless the
dividend is effectively connected with the conduct of a trade or business within
the United States by the Non-United States Holder (or if certain tax treaties
apply, is attributable to a United States permanent establishment maintained by
such Non-United States Holder), in which case the dividend will be subject to
the United States Federal income tax on net income on the same basis that
applies to United States persons generally. In the case of a Non-United States
Holder which is a corporation, such effectively connected income also may be
subject to the branch profits tax (which is generally imposed on a foreign
corporation on the repatriation from the United States of effectively connected
earnings and profits). Non-United States Holders should consult any applicable
income tax treaties that may provide for a lower rate of withholding or other
rules different from those described above. A Non-United States Holder may be
required to satisfy certain certification requirements in order to claim treaty
benefits or otherwise claim a reduction of or exemption from withholding under
the foregoing rules.
GAIN ON DISPOSITION
A Non-United States Holder will generally not be subject to United States
Federal income tax on gain recognized on a sale or other disposition of Shares
unless (i) the gain is effectively connected with the conduct of a trade or
business within the United States by the Non-United States Holder or, if tax
treaties apply, is attributable to a United States permanent establishment
maintained by the Non-United States Holder, (ii) in the case of a Non-United
States Holder who is a nonresident alien individual and holds Shares as capital
assets, such holder is present in the United States for 183 or more days in the
taxable year of disposition or either such individual has a "tax home" in the
United States or the gain is attributable to an office or other fixed place of
business maintained by such individual in the United States, (iii) the Company
is or has been a "United States real property holding corporation" for United
States Federal income tax purposes (which the Company does not believe that it
is or likely to become) and the Non-United States Holder holds or has held,
directly or indirectly, at any time during the five-year period ending on the
date of disposition, more than 5% of the Class A Common Shares or (iv) the
Non-United States Holder is subject to tax pursuant to the Internal Revenue Code
of 1986, as amended, provisions applicable to certain United States expatriates.
Gain that is effectively connected with the conduct of a trade or business
within the United States by the Non-United States Holder will be subject to the
United States Federal income tax on net income on the same basis that applies to
United States persons generally (and, with respect to corporate holders, under
certain circumstances, the branch profit tax) but will not be subject
31
<PAGE> 32
to withholding. Non-United States Holders should consult any applicable treaties
that may provide for different rules.
FEDERAL ESTATE TAXES
Shares owned or treated as owned by an individual who is a Non-United
States Holder at the date of death will be included in such individual's estate
for United States Federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the Internal Revenue Service and to
each Non-United States Holder the amount of dividends paid to, and the tax
withheld with respect to, such holder, regardless of whether any tax was
actually withheld. This information may also be made available to the tax
authorities of a country in which the Non-United States Holder resides.
Under the temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax at a rate of 31%
will generally apply to dividends paid on Shares to a Non-United States Holder
and to payments by a United States office of a broker of the proceeds of a sale
of Shares to a Non-United States Holder unless the holder certifies its
Non-United States Holder status under penalties of perjury or otherwise
establishes an exemption. Information reporting requirements (but not backup
withholding) will also apply to payments of the proceeds of sales of Shares by
foreign offices of United States brokers, or foreign brokers with certain types
of relationships to the United States, unless the broker has documentary
evidence in its records that the holder is a Non-United States Holder and
certain other conditions are met, or the holder otherwise establishes an
exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the Non-United
States Holder's United States Federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service.
These information reporting and backup withholding rules are under review
by the United States Treasury, and their application to the Shares could be
changed by future regulations. On October 14, 1997, Treasury Regulations were
published in the Federal Register concerning the withholding of tax and
reporting for certain amounts paid to nonresident individuals and foreign
corporations. The Treasury Regulations will be effective for payments made after
December 31, 1999. After that date, Non-United States Holders claiming treaty
benefits or claiming that income is effectively connected will be required to
submit an appropriate version of Internal Revenue Service Form W-8 to the U.S.
withholding agent. New rules will apply to Non-United States Holders who invest
through intermediaries. Prospective investors should consult their tax advisors
concerning the United States Treasury regulations and the potential effect on
their ownership of Shares.
32
<PAGE> 33
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"U.S. Purchase Agreement") among the Company, each of the Selling Shareholders
and each of the underwriters named below (the "U.S. Underwriters"), and
concurrently with the sale of 1,100,000 Shares to the International Manager (as
defined below), the Selling Shareholders have agreed to sell to the U.S.
Underwriters, and each of the U.S. Underwriters severally has agreed to purchase
from the Selling Shareholders, the number of Shares set forth opposite its name
below.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 2,960,000
Bear, Stearns & Co. Inc..................................... 120,000
Credit Suisse First Boston Corporation...................... 120,000
Donaldson, Lufkin & Jenrette Securities Corporation......... 120,000
A.G. Edwards & Sons, Inc.................................... 120,000
Gabelli & Company, Inc...................................... 120,000
Lehman Brothers Inc......................................... 120,000
McDonald & Company Securities, Inc.......................... 120,000
J.P. Morgan Securities Inc.................................. 120,000
PaineWebber Incorporated.................................... 120,000
Prudential Securities Incorporated.......................... 120,000
Smith Barney Inc............................................ 120,000
Value Investing Partners, Inc............................... 120,000
---------
Total.......................................... 4,400,000
=========
</TABLE>
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") is
acting as representative (the "U.S. Representative") for the U.S. Underwriters.
The Company and the Selling Shareholders have also entered into a purchase
agreement (the "International Purchase Agreement" and, together with the U.S.
Purchase Agreement, the "Purchase Agreements") with Merrill Lynch International
outside the United States and Canada (the "International Manager" and, together
with the U.S. Underwriters, the "Underwriters"). Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 4,400,000 Shares to the U.S. Underwriters pursuant to the U.S.
Purchase Agreement, the Selling Shareholders have agreed to sell to the
International Manager, and the International Manager has agreed to purchase from
the Selling Shareholders, an aggregate of 1,100,000 Shares. The public offering
price per Share and underwriting discount per Share are identical under the U.S.
Purchase Agreement and the International Purchase Agreement. The respective
percentages of Shares to be sold by the Selling Shareholders will be identical
in the U.S. Offering and the International Offering.
In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the International Manager, respectively, have
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Shares being sold pursuant to each such agreement if any of the Shares
being sold pursuant to such agreement are purchased. Under certain circumstances
involving a default by a U.S. Underwriter, the commitments of non-defaulting
U.S. Underwriters may be increased or the U.S. Purchase Agreement may be
terminated. The sale of Shares to the U.S. Underwriters is conditioned upon the
sale of Shares to the International Manager and vice versa.
The U.S. Underwriters and the International Manager have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. The Underwriters are permitted to sell Shares
to each other for purposes of resale at the public offering price, less an
amount not greater than the selling concession. Under the terms of the
Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom they sell
Shares will not offer to sell or sell Shares to persons who are non-U.S. or
non-Canadian
33
<PAGE> 34
persons or to persons they believe intend to resell to persons who are non-U.S.
or non-Canadian persons, and the International Manager and any dealer to whom
they sell Shares will not offer to sell or sell Shares to U.S. persons or to
Canadian persons or to persons they believe intend to resell to U.S. or Canadian
persons, except in the case of transactions pursuant to the Intersyndicate
Agreement.
The U.S. Representative has advised the Selling Shareholders that the U.S.
Underwriters propose initially to offer the Shares to the public at the public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess of $.66 per Share. The
U.S. Underwriters may allow, and such dealers may reallow, a discount not in
excess of $.10 per Share on sales to certain other dealers. After the Offerings,
the public offering price, concession and discount may be changed.
The Scripps Trust and the Howard Trust have granted options to the U.S.
Underwriters, exercisable for 30 days after the date of this Prospectus, to
purchase up to an aggregate of 366,667 and 293,333 additional Shares,
respectively, at the public offering price set forth on the cover page of this
Prospectus, less the underwriting discount. The U.S. Underwriters may exercise
this option only to cover over-allotments, if any, made on the sale of the
Shares offered hereby. To the extent that the U.S. Underwriters exercise this
option, each U.S. Underwriter will be obligated, subject to certain conditions,
to purchase a number of additional Shares proportionate to such U.S.
Underwriter's initial amount reflected in the foregoing table. The Scripps Trust
and the Howard Trust also have granted options to the International Manager,
exercisable for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 91,667 and 73,333 additional Shares, respectively, to cover
over-allotments, if any, on terms similar to those granted to the U.S.
Underwriters. If purchased, the Underwriters will offer such Shares on the same
terms as those on which the 5,500,000 Shares are being offered.
The Company and the Selling Shareholders have agreed, subject to certain
exceptions, not to directly or indirectly (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise dispose
of or transfer any Common Voting Shares or Class A Common Shares or securities
convertible into or exchangeable or exercisable for Common Voting Shares or
Class A Common Shares, as the case may be, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Voting
Shares or Class A Common Shares whether any such swap or transaction is to be
settled by delivery of Common Voting Shares or Class A Common Shares or other
securities, in cash or otherwise, without the prior written consent of Merrill
Lynch on behalf of the Underwriters for a period of 180 days after the date of
this Prospectus.
In connection with the Offerings, the Underwriters may engage in certain
transactions which stabilize, maintain or otherwise affect the price of Class A
Common Shares. Such transactions may include the purchase of Class A Common
Shares in the open market to cover short positions created by over-allotments or
to stabilize the price of Class A Common Shares. In general, purchases of a
security for the purpose of stabilization or to reduce a short position could
cause the price of the security to be higher than it might be in the absence of
such purchases. Neither the Company nor any of the Underwriters make any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Shares. In
addition, neither the Company nor any of the Underwriters make any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Underwriters do not intend to confirm sales of the Shares offered
hereby to any accounts over which they exercise discretionary authority.
Each of the Company and the Selling Shareholders has agreed to indemnify
the U.S. Underwriters and the International Manager against certain liabilities,
including certain liabilities under the Securities Act, or to contribute to
payments the Underwriters may be required to make in respect thereof.
34
<PAGE> 35
LEGAL MATTERS
Baker & Hostetler LLP, Cincinnati, Ohio, will pass upon certain legal
matters in respect of the Shares offered hereby for the Company and the Selling
Shareholders. Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago,
Illinois, will pass upon certain legal matters for the Underwriters. John H.
Burlingame, a Senior Partner of Baker & Hostetler LLP, is a director and a
member of the Executive Committee of the Board of Directors of the Company and a
trustee of the Scripps Trust. See "Selling Shareholders--The Edward W. Scripps
Trust."
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated herein by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
35
<PAGE> 36
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERINGS
CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING SHAREHOLDERS OR ANY UNDERWRITER, DEALER OR AGENT. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
Prospectus Summary.................... 5
Price Range of Class A Common Shares
and Dividends....................... 8
Capitalization........................ 9
Selected Consolidated Financial
Data................................ 10
Business.............................. 13
Management............................ 20
Selling Shareholders.................. 22
Security Ownership of Certain
Beneficial Owners and Selling
Shareholders........................ 24
Description of Capital Stock.......... 25
Certain Transactions.................. 29
Certain United States Federal Tax
Consequences to Non-U.S.
Shareholders........................ 31
Underwriting.......................... 33
Legal Matters......................... 35
Experts............................... 35
</TABLE>
======================================================
======================================================
5,500,000 SHARES
[SCRIPPS LOGO]
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH & CO.
JUNE 12, 1998
======================================================
<PAGE> 37
PROSPECTUS
5,500,000 SHARES
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
------------------------
SCRIPPS LOGO
Of the 5,500,000 Class A Common Shares, $.01 par value (the "Shares"), of
The E.W. Scripps Company (the "Company") being offered hereby, 3,055,556 are
being offered by The Edward W. Scripps Trust (the "Scripps Trust") and 2,444,444
shares are being offered by The Jack R. Howard Trust (the "Howard Trust," and
together with the Scripps Trust, the "Selling Shareholders"). The Company is not
offering any of its capital stock hereby and will not receive any proceeds from
the sale of the Shares by the Selling Shareholders. See "Selling Shareholders."
Of the 5,500,000 Shares offered hereby, 1,100,000 Shares are being offered
initially outside the United States and Canada by the International Manager (the
"International Offering"), and 4,400,000 shares are being offered initially in a
concurrent offering in the United States and Canada by the U.S. Underwriters
(the "U.S. Offering," and together with the International Offering, the
"Offerings"). The public offering price and the underwriting discount per Share
are identical for each of the Offerings. See "Underwriting."
The Class A Common Shares are listed on the New York Stock Exchange, Inc.
(the "NYSE") under the symbol "SSP." On June 11, 1998, the last reported sale
price of the Class A Common Shares on the NYSE was $50 7/16 per share. See
"Price Range of Class A Common Shares and Dividends."
Holders of Class A Common Shares are entitled to elect the greater of three
or one-third of the directors of the Company, but are not entitled to vote on
any other matters except as required by Ohio law. Holders of Common Voting
Shares of the Company are entitled to elect all remaining directors and to vote
on all other matters requiring a vote of shareholders. Holders of Class A Common
Shares and Common Voting Shares are entitled to the same cash dividends and to
share equally in distributions on liquidation of the Company. Each Common Voting
Share is convertible into one Class A Common Share. See "Description of Capital
Stock."
After giving effect to the sale of the Shares (and assuming that the
Underwriters' over-allotment options are not exercised), the Scripps Trust will
own approximately 48.0% of the outstanding Class A Common Shares and
approximately 83.5% of the outstanding Common Voting Shares and will continue to
control the Company, and the Howard Trust will own approximately 1.4% of the
outstanding Class A Common Shares and approximately .9% of the outstanding
Common Voting Shares. See "Selling Shareholders."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
========================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT (1) SHAREHOLDERS(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.......................................... $50.00 $1.125 $48.875
- ------------------------------------------------------------------------------------------------------------------------
Total (3).......................................... $275,000,000 $6,187,500 $268,812,500
========================================================================================================================
</TABLE>
(1) Each of the Company and the Selling Shareholders has agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting expenses of the Offerings payable by the Selling
Shareholders estimated at $321,000.
(3) The Scripps Trust and the Howard Trust have granted to the International
Manager and the U.S. Underwriters, on a pro rata basis, options to purchase
up to an aggregate additional 458,333 Shares and 366,667 Shares,
respectively, in each case exercisable within 30 days of the date hereof,
solely to cover over-allotments, if any. If such options are exercised in
full, the total Price to Public, Underwriting Discount and Proceeds to
Selling Shareholders will be $316,250,000, $7,115,625 and $309,134,375,
respectively. See "Underwriting."
------------------
The Shares are being offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to the approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Shares will be made in New York, New York on or about June 17,
1998.
------------------
MERRILL LYNCH INTERNATIONAL
------------------
The date of this Prospectus is June 12, 1998.
<PAGE> 38
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"International Purchase Agreement") among the Company, each of the Selling
Shareholders and Merrill Lynch International (the "International Manager"), and
concurrently with the sale of 4,400,000 Shares to the U.S. Underwriters (as
defined below), the Selling Shareholders have agreed to sell to the
International Manager, and the International Manager has agreed to purchase from
the Selling Shareholders 1,100,000 Shares.
The Company and the Selling Shareholders have also entered into a purchase
agreement (the "U.S. Purchase Agreement" and, together with the International
Purchase Agreement, the "Purchase Agreements") with certain underwriters in the
United States and Canada (collectively, the "U.S. Underwriters" and, together
with the International Manager, the "Underwriters") for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated is acting as representative (the "U.S.
Representative" and, together with the International Manager, the
"Representatives"). Subject to the terms and conditions set forth in the U.S.
Purchase Agreement, and concurrently with the sale of 1,100,000 Shares to the
International Manager pursuant to the International Purchase Agreement, the
Selling Shareholders have agreed to sell to the U.S. Underwriters, and the U.S.
Underwriters severally have agreed to purchase from the Selling Shareholders, an
aggregate of 4,400,000 Shares. The public offering price per Share and
underwriting discount per Share are identical under the International Purchase
Agreement and the U.S. Purchase Agreement. The respective percentages of Shares
to be sold by the Selling Shareholders will be identical in the U.S. Offering
and the International Offering.
In the International Purchase Agreement and the U.S. Purchase Agreement,
the International Manager and the several U.S. Underwriters, respectively, have
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Shares being sold pursuant to each such agreement if any of the Shares
being sold pursuant to such agreement are purchased. Under certain circumstances
involving a default by a U.S. Underwriter, the commitments of non-defaulting
U.S. Underwriters may be increased or the U.S. Purchase Agreement may be
terminated. The sale of Shares to the International Manager is conditioned upon
the sale of Shares to the U.S. Underwriters and vice versa.
The International Manager and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. The Underwriters are permitted to sell Shares
to each other for purposes of resale at the public offering price, less an
amount not greater than the selling concession. Under the terms of the
Intersyndicate Agreement, the International Manager and any dealer to whom they
sell Shares will not offer to sell or sell Shares to U.S. persons or Canadian
persons or to persons they believe intend to resell to persons who are U.S.
persons or Canadian persons, and the U.S. Underwriters and any dealer to whom
they sell Shares will not offer to sell or sell Shares to non-U.S. persons or to
non-Canadian persons or to persons they believe intend to resell to persons who
are non-U.S. or non-Canadian persons, except in the case of transactions
pursuant to the Intersyndicate Agreement.
The International Manager has advised the Selling Shareholders that it
proposes initially to offer the Shares to the public at the public offering
price set forth on the cover page of this Prospectus and to certain dealers at
such price less a concession not in excess of $.66 per Share. The International
Manager may allow, and such dealers may reallow, a discount not in excess of
$.10 per Share on sales to certain other dealers. After the Offerings, the
public offering price, concession and discount may be changed.
The Scripps Trust and the Howard Trust have granted options to the
International Manager, exercisable for 30 days after the date of this
Prospectus, to purchase up to an aggregate of 91,667 and 73,333 additional Class
A Common Shares, respectively, at the public offering price set forth on the
cover page of this Prospectus, less the underwriting discount. The International
Manager may exercise this option only to cover over-allotments, if any, made on
the sale of the Shares offered hereby. The Scripps Trust and the Howard Trust
also have granted options to the U.S. Underwriters, exercisable for 30 days
after the date of this Prospectus, to purchase up to an aggregate of 366,667 and
293,333 additional Class A Common Shares, respectively, to cover
over-allotments, if any, on terms similar to those granted to the International
Manager. If purchased, the Underwriters will offer such Shares on the same terms
as those on which the 5,500,000 Shares are being offered.
33
<PAGE> 39
The Company and the Selling Shareholders have agreed, subject to certain
exceptions, not to directly or indirectly (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise dispose
of or transfer any Common Voting Shares or Class A Common Shares or securities
convertible into or exchangeable or exercisable for Common Voting Shares or
Class A Common Shares, as the case may be, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Voting
Shares or Class A Common Shares whether any such swap or transaction is to be
settled by delivery of Common Voting Shares or Class A Common shares or other
securities, in cash or otherwise, without the prior written consent of Merrill
Lynch on behalf of the Underwriters for a period of 180 days after the date of
this Prospectus.
In connection with the Offerings, the Underwriters may engage in certain
transactions which stabilize, maintain or otherwise affect the price of Class A
Common Shares. Such transactions may include the purchase of Class A Common
Shares in the open market to cover short positions created by over-allotments or
to stabilize the price of Class A Common Shares. In general, purchases of a
security for the purpose of stabilization or to reduce a short position could
cause the price of the security to be higher than it might be in the absence of
such purchases. Neither the Company nor any of the Underwriters make any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Shares. In
addition, neither the Company nor any of the Underwriters make any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Underwriters do not intend to confirm sales of the Shares offered
hereby to any accounts over which they exercise discretionary authority.
Each of the Company and the Selling Shareholders has agreed to indemnify
the U.S. Underwriters and the International Manager against certain liabilities,
including certain liabilities under the Securities Act, or to contribute to
payments the Underwriters may be required to make in respect thereof.
34
<PAGE> 40
======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERINGS
CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING SHAREHOLDERS OR ANY UNDERWRITER, DEALER OR AGENT. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
Prospectus Summary.................... 5
Price Range of Class A Common Shares
and Dividends....................... 8
Capitalization........................ 9
Selected Consolidated Financial
Data................................ 10
Business.............................. 13
Management............................ 20
Selling Shareholders.................. 22
Security Ownership of Certain
Beneficial Owners and Selling
Shareholders........................ 24
Description of Capital Stock.......... 25
Certain Transactions.................. 29
Certain United States Federal Tax
Consequences to Non-U.S.
Shareholders........................ 31
Underwriting.......................... 33
Legal Matters......................... 35
Experts............................... 35
</TABLE>
======================================================
======================================================
5,500,000 SHARES
[SCRIPPS LOGO]
THE E.W. SCRIPPS COMPANY
CLASS A COMMON SHARES
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH INTERNATIONAL
JUNE 12, 1998
======================================================
