Social causes and the emergence of Vice President Kamala Harris as the Democratic Party nominee for the White House are expected to bolster political ad spending across the E. W. Scripps Company’s portfolio of five dozen local TV stations and some multicast networks, executives confirmed this week.
“Election spending remains robust for the U.S. Senate races in Montana and Ohio, and at least four states where we have stations have placed reproductive rights issues on their November ballots,” Scripps CEO Adam Symson said in a statement that accompanied the broadcaster’s most-recent financial earnings report.
“We are beginning to see additional upside from Vice President Kamala Harris’s entry into the presidential race,” Symson continued. “Overall, this year’s political ad revenue performance for broadcast television is a testament to our durability as a brand-safe platform for political candidates and campaigns.”
Scripps says it expects political ad spending to reach “record levels,” telling investors it could earn as much as $290 million in political campaign and cause spending by the end of the year.
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During the second financial (Q2) quarter of the year, Scripps earned $28.2 million in political ad spending across its local stations and multicast networks, which was significantly higher than the $3.8 million earned during Q2 2023 — which was not an election year.
Political ad spending is expected to help Scripps address a slowdown in core advertising revenue, which some of its peer broadcasters like TEGNA and Gray Television have also experienced over the past few financial quarters. Core advertising — which does not include political ad spending — clocked in at $139 million, or nearly 7 percent lower on a year-over basis. Scripps said higher uptake in political ad inventory displaced some core ad campaigns across its local TV stations.
Distribution revenue — or fees charged to cable, satellite and some streaming cable-like services for the privilege of offering Scripps-owned network affiliates channels to subscribers — came in at $194 million, or $1 million lower than last year. Scripps operates ABC, CBS, Fox and NBC stations in about 40 local TV markets across the country. Most of its local TV stations offer programming from Ion Television, which it acquired four years ago.
Segment expenses increased to $277 million during Q2, which the company attributed to licensing payments made to two National Hockey League teams — the Las Vegas Golden Knights and the former Arizona Coyotes — whose games are, or were, aired on local Scripps-owned stations in their respective TV markets.
Local TV profit clocked in at $88.1 million, or around $7 million more than what Scripps earned during Q2 2023.
Scripps Network revenue was $209 million, or nearly 10 percent lower on a year-over basis. The segment includes multicast and free, ad-supported streaming TV (FAST) channels like Scripps News, Court TV, Laff, Grit and Bounce TV. Segment profit was $37.7 million, or around 37 percent lower compared to the prior year. Scripps attributed lower network revenue and profit to the “results of last year’s national advertising upfront,” suggesting there were fewer commitments from buyers against the company’s multicast and FAST channels.
“We are seeing a better performance in this season’s upfront sales cycle,” Symson said. “With commitments from the majority of our advertising agency clients, we have volume increases of low single digits over last year.”
Scripps says sports has made a big difference in terms of attracting advertiser interest. In addition to its continued offering of Las Vegas Golden Knights games, Scripps began airing Women’s National Basketball Association (WNBA) games through its Ion TV network and FAST channel earlier this year. At least three WNBA showcase games generated more than 1 million overall viewers, “proving to advertisers that Ion can deliver them to significantly large sports audiences,” Symson said.
The company is also hoping to capitalize on higher interest in women’s soccer matches, thanks in large part to the 2024 Summer Olympic Games, where the U.S. Women’s National Soccer Team (USWNT) advanced to the knockout stage earlier this week. Scripps shares telecast rights to some National Women’s Soccer League matches with other broadcasters, and hopes the fandom associated with the USWNT brings viewers to those matches on Scripps Sports, the sports brand it operates through Ion and some local TV stations.
Scripps executives are expected to offer more thoughts on the company’s Q2 performance and its projections for the remainder of 2024 during a conference call with investors early Friday morning.
