The E. W. Scripps Company saw its overall revenue dip to $524 million during the first three months (Q1) of the year, weighed by declines in core and political advertising after an election year that brought many of its local stations a cash windfall on both fronts.
In that respect, Scripps was similarly positioned to its peer broadcasters who also reported year-over declines in revenue, but company executives said this week they remain focused on executing across certain growth strategies and adhering to discipline with respect to spending and investments.
To that end, Scripps refinanced many of its loans during Q1 that will give the broadcaster a longer financial runway to continue investing in news and sports. The company also sold off the building associated with its TV station in West Palm Beach, Florida as well as five transmission towers, which brought in some cash during the period. Those sales brought in an additional $63 million during the quarter.
Advertising and distribution revenue were sore points for Scripps, particularly on the local media side, where core advertising dipped more than 3 percent and political ad revenue was down 78 percent. Distribution revenue clocked in at $187 million, down from $197 million on a year-over basis, which Scripps attributed to higher churn in the cable and satellite industry that cuts into the fees it can collect from the redistribution of its local and national channels.
On the national side, Scripps Networks saw its revenue dip 5.4 percent to $198 million, though its profit increased 28 percent to $64.1 million, something executives attributed to stronger earnings from certain networks like Ion that are available on free streaming platforms. Revenue attributed to connected TV distribution was up 42 percent, according to Scripps Chief Financial Officer Jason Combs.
Ion is the biggest driver of connected TV revenue for Scripps, Combs said, with advertisers expressing a high amount of interest in buying spots against live sports aired on the network. Later this month, Ion will start airing games from the 2025 season of the Women’s National Basketball Association (WNBA), and it also airs games from the National Women’s Soccer League (NWSL).
Looking ahead, Combs said the company should start to see the benefit of ongoing cable and satellite carriage negotiations, which will be realized in part during Q2. The company completed new deals with 25 percent of its pay TV partners, and is working through the rest.
Local media revenue is expected to be “down in the high single-digit range” during Q2, with “core revenue down in the low single-digit range,” Combs said. He attributed the lower revenue to ongoing economic uncertainty related to tariffs — one of the few broadcast executives to affirm that economic issues rooted in geopolitical matters are likely to weigh down ad buys in local TV.
But the political environment isn’t all bad news: Scripps CEO Adam Symson said the broadcaster remains optimistic that federal deregulation efforts, particularly with respect to local media ownership, will allow broadcasters to scale up their operations in a way that proves financially beneficial.
“We see the prospect of local broadcast industry consolidation that will drive growth by finally allowing us to deepen our presence in our local markets, building upon the strong relationships we already have with viewers and advertisers to create even greater shareholder value with significant efficiency,” Symson said on Thursday. “We believe financial growth through our existing businesses is just around the corner. The basis for this opportunity is the deep local and national connections we have across this country, specifically created through our local news, live sports, and audience and advertiser relationships.”
To learn more about how live sports will play a significant role in Scripps’ future asset acquisition strategy, read our Sunday column on Multicast News by clicking or tapping here.
