Belo Corp. announced Monday morning that its board of directors has unanimously approved a plan to create separate television and newspaper businesses by spinning off the newspaper business into a publicly-traded company called A. H. Belo Corp.

The spin-off will be accomplished through a tax-free distribution of A. H. Belo shares to Belo Corp. shareholders, and is expected to occur in the first quarter of 2008 subject to customary regulatory approvals. Both the new A. H. Belo and Belo Corp. ("Belo") will be headquartered in Dallas, Texas and the Series A common shares of both companies are expected to be listed on the New York Stock Exchange.

The New A. H. Belo Corp.
A. H. Belo Corp. will own and operate the Company's flagship newspaper, The Dallas Morning News, winner of eight Pulitzer Prizes since 1986 and the 9th largest daily and 12th largest Sunday newspaper in the nation based on circulation; The Providence Journal, the oldest continuously published daily newspaper in the U.S.; and The Press-Enterprise, serving Southern California's Inland Empire region, one of the fastest-growing areas in the U.S. A. H. Belo will also own and manage the various Web sites associated with these properties, as well as certain niche products and direct mail and commercial printing businesses. A. H. Belo's combined newspaper and related online businesses reach a total audience of 3.7 million people in markets with attractive long-term demographics. These businesses currently have annual revenues of approximately $750 million and about 3,800 employees. Robert W. Decherd, currently chairman and chief executive officer of Belo Corp., will become chairman, president and chief executive officer of A. H. Belo, and non-executive chairman of Belo Corp. The company said A. H. Belo will be debt-free upon completion of the spin-off.

Belo Corp.
At the effective date of the spin-off, Belo Corp., with approximately 3,200 employees and revenues of more than $750 million, will be the largest pure-play publicly-traded television station company in the nation. Belo will own and operate 20 television stations (including ABC, CBS, NBC, Fox, CW and My Network TV affiliates) reaching 14% of U.S. television households, and their associated Web sites, in 15 markets.

Belo operates nine stations in seven of the top 25 markets in the nation, with six stations located in the top-15 markets of Dallas/Fort Worth, Houston, Seattle/Tacoma and Phoenix.

Belo will also own two 24-hour regional cable news channels: Northwest Cable News (NWCN) and Texas Cable News (TXCN). NWCN is the nation's second-largest regional cable news channel, reaching 2.1 million households in the Pacific Northwest. TXCN is Texas' only regional cable news channel, reaching more than 1.8 million homes. Belo will also retain ownership of two additional news channels and will continue to operate two others through partnerships.

Dunia A. Shive, currently president and chief operating officer of Belo Corp., will become president and chief executive officer of Belo Corp.

Said Decherd: "The decision to create separate television and newspaper companies recognizes the profound yet distinct changes occurring in these industries and the appeal of the separate businesses to discrete investor groups. This action should provide shareholders with greater insight into each business, while making each business more nimble and better able to allocate capital to compete and grow within its respective industry."

Said Shive: "Robert and I strongly believe, as does our Board, that both companies will benefit from the increased focus and flexibility this transaction will bring. Creating two companies will allow Belo Corp. to focus exclusively on unique opportunities that exist within our television and online businesses. Belo television stations are among the premier properties in the industry. This new structure will allow us to place even greater emphasis on the needs of our loyal audience and advertiser base. It will also continue to provide excellent career opportunities for our employees."

Decherd noted that the standalone companies will have corporate staff and expenses appropriate for their size and purpose. The combined corporate expense of the two entities, after an initial transition period, is expected to be less than Belo Corp.'s corporate expense today. Corporate expenses are expected to be reduced over time, particularly at A. H. Belo.

Decherd continued: "The spin-off will not affect the important and durable relationships that Belo and its operating units have established with advertisers, vendors and the local communities in which we operate."

Decherd added: "Regrettably, regulatory obstacles to crossownership remain in place. We have been firm believers in media convergence for a long time and continue to think convergence is very important to the long-term interests of newspapers and television stations. Relaxation of media ownership rules is long overdue. That notwithstanding, our experience with virtual cross-ownership in numerous markets suggests that some synergies across print, broadcast and online media can be effectively achieved through alliances and partnerships."

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