Debt rating of Rocky owner E. W. Scripps cut 5 notches

By David Milstead, Rocky Mountain News (Contact)

Published July 10, 2008 at 9:05 p.m.

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E.W. Scripps, owner of the Rocky Mountain News, had its debt rating cut five notches by ratings agency Standard & Poor's from "A," an investment-grade rating, to "BB+," the highest of the junk-bond ratings.

S&P said Scripps requested the rating be withdrawn, meaning S&P will no longer evaluate the Cincinnati-based company's creditworthiness.

Scripps spun off its cable networks and Web sites into a new company, Scripps Networks Interactive, on July 1. The company's newspapers and broadcast television stations remained.

S&P said it viewed that as a "weakened business profile and narrower diversification." Scripps "is now more reliant on the declining newspaper business and on a relatively small broadcast TV business that is less profitable than its peers . . . Management's track record of maintaining a conservative financial policy and low leverage partly offsets these factors."

Scripps has $50 million in bank borrowings and no long-term debt.

Ratings agencies have been downgrading newspaper companies like Chicago-based Tribune and Denver-based MediaNews, owner of The Denver Post.

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