• by David Goetzl  @dgoetzl, July 2, 2008

The new entity, with HGTV and Food Network leading the way, became a separate, publicly traded company Tuesday and saw its shares rise 3%, even as media stocks have struggled lately. Scripps Networks Interactive was split off from the E.W. Scripps Co. in a bid to unlock growth likely hindered by old-line newspaper and local TV station businesses.

In that vein, reflecting investors' lack of enthusiasm for the new E.W. Scripps, that company's share price on its first day was flat at $3.07. It operates newspapers in 15 markets and 10 local stations.

The new Scripps Networks Interactive (SNI) is led by Ken Lowe, who previously headed the combined E.W. Scripps. While Scripps' cable networks--which also include Fine Living, DIY and Great American Country--are based in Knoxville, Tenn., Lowe will continue to operate out of SNI's corporate offices in Scripps' long-time Cincinnati home base.

SNI shares increased $1.20 each to close at $39.75 Tuesday. The 3% rise outpaced the Dow's .28% gain. It's possible that the company was initially priced too low, and it could now suffer the fate of media stocks that have tumbled of late.

Scripps' cable networks have grown consistently--prompting the split and yielding a 15% increase in first-quarter revenue this year to $311 million. Ad revenue jumped 15% to $236 million with a strong scatter market.

In 2007, HGTV contributed 38% of the would-be SNI's revenue, Food Network accounted for 31%. Interactive assets such as uSwitch and ShopZilla accounted for 18%.

The prospects for the new E.W. Scripps remain murky. In the first quarter, newspaper revenue was down 8.3% to $156 million (ad dollars dropped 10%). Another trouble spot: Even as newspaper chains are experiencing falling ad dollars, revenues at online operations--although small--are generally increasing, but Scripps' were flat in Q1 at $10 million.

Local TV revenue was down slightly ($500,000) versus Q1 in 2007.