The deal announced late Wednesday is the latest move by media companies to separate sluggish newspaper operations from more profitable broadcast units.
The Tribune Co., for example, is splitting its print business, including the Los Angeles Times, and its TV channels. News Corp. and Time Warner Inc. have also recently split into separate publishing and entertainment companies.
The news sent Journal Communications shares up nearly 26 percent and E.W. Scripps shares up almost 11 percent in morning trading Thursday.
Journal Communication's newspaper component, Journal Media Group, will be headquartered in Milwaukee and operate in 14 markets, according to news releases from the companies. It will combine Journal Communications' Milwaukee Journal Sentinel, community publications and digital products with Scripps' daily newspapers, including the Memphis Commercial Appeal, plus community and digital products.
Meanwhile, Journal Communications' broadcast assets will be folded into Scripps, with headquarters remaining in Cincinnati. The company will own and operate TV and radio stations serving 27 markets, making it the fifth-largest independent TV group in the country, according to the releases.
"On both sides of this transaction we feel there is great value, great logic and a great cultural fit," Steven J. Smith, chairman and chief executive officer of Journal Communications, told the Milwaukee Journal Sentinel. Smith will serve as the non-executive chairman of Journal Media.
The move makes it easier for the different units to make acquisitions and investments, the companies said.
Tim Stautberg, senior vice president of newspapers for Scripps, will become president, CEO and a director of Journal Media. Richard A. Boehne will remain as board chairman, president and CEO of Scripps, the releases said.
The companies say both boards of directors have approved the deal, which is expected to close in 2015. Shareholders and regulators must also approve it.
Scripps shareholders will own 69 percent of the combined broadcasting company and 59 percent of Journal Media Group. Journal Communications shareholders will own 31 percent of the broadcasting company and 41 percent of the newspaper group. Scripps shareholders will also receive a $60 million cash dividend.
Scripps was founded in 1879 and started The Cincinnati Post. It grew into a media conglomerate with TV, print and digital media. The Scripps National Spelling Bee will remain under Scripps' stewardship.
Journal Communications started in 1882 with the Milwaukee Journal, later called the Milwaukee Journal Sentinel, and eventually expanded into TV and other media, concentrated in the Midwest.
Scripps shares rose $2.17, or 10.9 percent, to $22.16 in morning trading. The stock had been down 8 percent since the beginning of the year.
Journal Communications shares jumped $2.27, or 25.9 percent to $11.03 in morning trading. Shares had been down 6 percent so far this year.