Tegna completes its Cars.com spinoff

Martore Gracia 11102016 05 cx
With the spinoff of Cars.com officially complete Thursday, Tegna President and CEO Gracia Martore also stepped down in retirement effective immediately, replaced by former Tegna Media CEO Dave Lougee.
Joanne S. Lawton
Andy Medici
By Andy Medici – Senior Staff Reporter, Washington Business Journal
Updated

Tegna Inc. has officially sloughed off its Cars.com division, now an independent, publicly traded company — a corporate break that also marks the leadership transition for the McLean digital media company.

Tegna (NYSE: TGNA) said Chicago-based Cars.com will begin trading on the New York Stock Exchange under the symbol CARS, effective Thursday. As of close of business May 18, Tegna stockholders retained their Tegna shares and received one share of Cars.com for every three shares of Tegna they owned.

With that final move, Tegna CEO Gracia Martore will retire and step down from the board. Dave Lougee, formerly president of Tegna Media, will succeed her, as planned, and join Tegna's board of directors. Marjorie Magner will continue as Tegna's board chairwoman.

This all comes as Tegna looks to shift its business model and dive deeper into original digital content to differentiate it in a crowded media industry. In the last few years, it has spun off its newspaper publishing arm Gannett and explored a possible sale of digital job search engine CareerBuilder, for which it owns a 53 percent stake.

All of these moves have shrunk the overall revenue base of the company. In June 2015, when Tegna split from its Gannett newspaper division, its $6 billion in annual revenue was halved to $3 billion. Revenue at Tegna’s digital vision, which includes Cars.com and CareerBuilder, grew to $1.4 billlion in 2016, up from $1.37 billion in 2015. Revenue at Cars.com grew $37 million that year, a 6 percent increase, which would put its revenue around $600 million for the year.

Without those two businesses, annual revenue for Tegna — which now operates 46 TV stations in 38 markets, including D.C., Seattle, New Orleans, Denver, Houston and Atlanta, and reaches about 36 million households — would be much closer to $2 billion.

Tegna, then operating as Gannett, paid $1.83 billion to buy out its partners in Cars.com in 2014. Before that, the company owned about 27 percent of the company.

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