Ongoing headwinds in the advertising market impacted the E. W. Scripps Company’s revenue during its first financial quarter of the year, the company affirmed on Friday.
The broadcast and streaming media company said it earned $528 million during the first three months of the year, a decrease of 6.7 percent compared to the prior quarter. Shareholders lost $31.1 million during the quarter, or 37 cents per share, mainly on weaker ad revenue and expensive programming deals.
Core advertising revenue for Scripps five dozen local broadcast stations declined 10 percent to $141 million. Political advertising brought in just $3.5 million, down from $5.8 million earned during the fourth quarter (Q4) of 2022. Distribution revenue, which includes fees collected from cable and satellite operators, increased 2.4 percent to $163 million.
In addition to its local broadcast properties, Scripps also operates several digital and streaming television networks, including Ion, Scripps News, Court TV, Laff, Grit and Bounce. Revenue from those networks brought in $216 million for the quarter, down 9.5 percent compared to Q4 2022.
“The country’s economic malaise continues to put pressure on our businesses,” Lisa Knutson, Scripps’ chief operating officer, told investors on a conference call Friday morning. “Local advertising remains relatively stronger than national, largely due to the return of automotive spending. But we do feel pressure across the whole advertising marketplace.
That said, Scripps says it is preparing for an improvement to its financial situation in the very short term. The company started restructuring some of its business operations earlier this year, which amounted to a 15 cents per share loss to investors but is expected to help the company save money over the long-term.
Looking toward the second financial quarter, Scripps executives said they expect local core advertising revenue to be “down mid-single digits,” an improvement from its current report, and local media revenue to be relatively flat or down just slightly compared to Q1 2022.
Scripps executives are also excited about the prospective of several sports content deals signed over the last three months, which has the potential to boost its revenue down the line. In April, Scripps said it had signed a comprehensive agreement with the Women’s National Basketball Association (WNBA) that will see many WNBA games aired on Ion and local Scripps-owned broadcast stations, starting later this month On Thursday, Scripps said its Las Vegas station KMCC (Channel 34) would begin airing hockey games in the fall after the company inked a distribution agreement with the National Hockey League’s (NHL) Vegas Golden Knights. Both the WNBA games and those played by the Vegas Golden Knights will also be offered through streaming products.
The sports deals are part of a new division called Scripps Sports, which is focused on forging even more agreements to bring professional sports to free broadcast and streaming television.
“Launching Scripps Sports was one important component of the reorganization we began at the start of the year,” Scripps CEO Adam Symson said on Friday. “The reorganization is aimed at positioning the company to capture opportunities in the industry growth areas of news, sports and entertainment; TV distribution platforms including over the air and connected TV; and datacasting and other businesses enabled by ATSC 3.0.”
On the news front, Scripps recently relaunched its free broadcast channel Newsy under the Scripps News brand. As part of the rebrand, Scripps consolidated its national news resources into a central operation — the channel is based in Atlanta — which Symson said “has created a powerful news operation that informs and engages audiences through our over-the-air and connected TV network while feeding our local newsrooms journalism our audiences can trust.”
“The result has been greater efficiency and high-impact journalism,” Symson affirmed.
On the ATSC 3.0 front, Scripps said it was working with Nexstar, Sony and HPE on a new core network that leverages the datacasting opportunities of the digital broadcast standard, which also goes by the name NextGen TV. Earlier in the week, executives at Scripps competitor Sinclair also said they were working to build a core network for datacasting. Both companies cited the same BIA Kelsey study that predicted opportunities from NextGen TV could unlock more than $10 billion in revenue for broadcasters by 2023.