Tom Uhlman for The New York Times  Kenneth W. Lowe, the chief executive of E. W. Scripps, diversified the company.  At the Food Network studio in New York, where Rachael Ray whips up her 30-minute dinners, several tables off screen were graced recently with wine glasses and silverware.  If the table décor was a bit fancy for Ms. Rays hugely popular 30 Minute Meals program, that was because it was not for her show. It was a dinner to precede the quarterly board meeting of the E. W. Scripps Company, the Food Networks parent.  The location was appropriate. By starting HGTV, or Home and Garden Television, and by buying control of the Food Network in 1997, Scripps  once an old-line newspaper company  had smartly diversified into niche cable networks well before the newspaper business as a whole began to suffer a major downturn.  Largely as a result, the companys stock has performed better since 2003 than that of the Washington Post Company, Gannett, The New York Times Company, the Tribune Company, Dow Jones and McClatchy. The cable network unit, Scripps Networks, has driven growth for the last five years, accounting for 44 percent of Scrippss $641 million in revenue in the second quarter, which ended June 30, in contrast to 28 percent from the companys newspapers.  But the media landscape continues to change, and now cable networks are, like newspapers, under new competitive pressure from the Web. The question for Scripps, along with many other media companies, is whether it can continue to adapt  and do so quickly enough.  Recently, the company made a misstep on its Shop at Home network, and has gambled on new online properties like USwitch, a comparison shopping site. In the last year, with newspaper stocks down and amid fears that cable growth is slowing, Scripps stock has fallen more than 10 percent from the beginning of the year to close at $43.33 a share on Friday.  Kenneth W. Lowe, the chief executive of Scripps since 2000, says he believes his company is suffering with other media companies. You have a great house, he said. It just happens to be in a not-so-great neighborhood.  While some investors worry that the stock price will continue to struggle, others argue that Mr. Lowe has done an impressive job of diversifying. His recent acquisition of Shopzilla, an online comparison shopping site, will pay off and hasten online expansion online by Scripps, they say.  I think the Scripps Networks will continue to do well because they target such specific markets and their programs lend themselves to video-on-demand, said Thomas A. Russo, a partner in the investment firm of Gardner Russo & Gardner, whose clients own shares of Scripps.  While journalists measure the success of newspapers by Pulitzer Prizes, investors usually do not. That said, one of the companys 21 newspapers, The Rocky Mountain News, has won four Pulitzers since 2000; the companys papers won five Pulitzers between 1980 and 1999.  John Temple, the editor and publisher of The Rocky Mountain News and director of content for Scrippss newspapers, said the company supported the role of the local paper. Ken Lowe gives individuals like me who are in positions of responsibility the independence and authority to do the right thing, he said. Our mantra has been to do what is right for our communities.  But John Morton, a veteran newspaper analyst, says that Scripps Newspapers, the companys newspaper unit, does not get high marks for its journalism. He added, however, that its cash-flow margins  28.9 percent in the second quarter  were among the highest in the industry.  Mr. Russo said: Newspapers are one crummy business. In order to make money in newspapers, you want to cover promos, potlucks and police blotters. The last thing you want to hear about is Pulitzers. And Scripps has done a great job.  Mr. Lowe, a dapper 56-year-old who has been at the company for 26 years, keeps a low profile. But he has the enormous advantage of strong support from the even-lower-profile Scripps family, which owns 44 percent of Scrippss equity, worth about $3 billion, and controls 87 percent of the votes that elect two-thirds of the board.  The heirs stake is controlled through the Scripps family trust. Two of its trustees, Edward W. Scripps Jr., 47, and Nackey E. Scagliotti, 60, sit on the Scripps board, together with 60-year-old Paul K. Scripps, a cousin from a different branch of the family (who is not a trust beneficiary).  An article in Business Day on Aug. 14, about the E. W. Scripps Company, the old-line newspaper chain, and its diversification into niche cable networks, misidentified the news agency started by Mr. Scripps to compete with The Associated Press. It was United Press, not United Press International. (U.P.I. was formed in 1958 when United Press and the International News Service merged.)
Diversifying into cable television helped the E. W. Scripps Company weather the newspaper downturn. Now Scripps is looking for its next evolution.