Scripps Revenue, Income Decline For Third Quarter 2017

Q3 Down

The E.W. SCRIPPS COMPANY third quarter 2017 total revenue decreased 7% year-to-year to $216 million, with the loss of $27 million in political revenue making the difference.  Net income fell from a gain of $12.5 million to a loss of $26.7 million (gain of 15 cents to loss of 32 cents per share), with a non-cash goodwill and intangibles impairment charge for CRACKED of $35.7 million and $2.4 million of restructuring charges adding $24 million to the 2017 loss (29 cents/share).

As for the radio division, revenue fell 7.4% to $17.9 million, with segment profit down 40.3% to $1.5 million.  Digital rose 13.3% to $17.8 million, with segment loss improving 0.9% to $5.7 million.  Television revenues dropped 45% to $32.1 million.

President/CEO ADAM SYMSON said, "In the third quarter, we began a deep analysis of our operating division and corporate cost structure, our non-core assets and the opportunities for our national content brands. We are committed to improving operating performance in our local media businesses, supporting the growth ahead with our national businesses and serving our audiences with news and information across all media platforms.

"In our television business, we saw core advertising move back into positive territory in the third quarter, factoring out incremental Olympics revenue as well as political for 2016. We have now secured shelf space for our local brands with a half-dozen major over-the-top TV disruptors, including YOUTUBETV, HULU and DIRECTTV Now, with net economics comparable to that of our cable and satellite platforms.

"In our national businesses, we aim to be the disruptor – capitalizing on consumers' changing media habits by creating compelling content and distributing it across both traditional and emerging platforms. This focus on consumer behavior, combined with national scale, is setting up these brands for continued healthy revenue growth.

"Among these opportunities is our newest acquisition, the KATZ networks, whose national reach and targeted audiences give us access to a deep well of national general-market advertisers. The four networks joined us Oct. 2 and are on track to meet their fourth-quarter financial goals.

"We are disappointed by the subpar financial performance at CRACKED and the resulting impairment and goodwill write-down. But we are moving quickly to right size the business's expense structure, curtail investment and bring it to profitability for 2018.

"NEWSY and MIDROLL are both on track to deliver strong revenue growth for the year. Newsy is now nearly fully distributed on the major OTT services and is leveraging that success into gaining carriage on cable and satellite systems in order to participate in that lucrative marketplace. After our recent acquisition of RLTV carriage agreements, we are transitioning the programming to NEWSY and expect to further expand its reach to about 40 million cable and satellite subscribers by the end of next year."

The company projects radio revenues to decline by "high single digits" in fourth quarter 2017.

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