Scripps Second Quarter Revenues Up, Income Down

Q2 Report

The E.W. SCRIPPS COMPANY's second quarter revenues rose 12% year-to-year to $359 million, boosted by $55.7 million from the addition of 8 TV stations spun off from the NEXSTAR acquisition of TRIBUNE MEDIA and 15 stations from CORDILLERA COMMUNICATIONS during 2019, although the company has moved podcast operation STITCHER, which it recently announced is being sold to SIRIUSXM for $325 million, to the "discontinued operations" category.

The company is also selling CW affiliate WPIX-TV/NEW YORK, acquired in the TRIBUNE deal, to NEXSTAR-affiliated MISSION BROADCASTING INC. for $75 million plus $5 million in accrued interest.

Local Media revenue (TV stations) rose 17% to $277 million, but core advertising revenue decreased 17% to $117 million; National Media revenue (TRITON DIGITAL, NEWSY, and the KATZ digital TV networks) fell from $81.4 million to $80.5 million. Income from continuing operations fell from a gain of $5.8 million to a loss of $17.5 million (7 to -22 cents/share).

Pres./CEO ADAM SYMSON said, "In early MARCH, the onset of a global pandemic caused business disruptions that nearly brought the advertising marketplace to a halt. The death of GEORGE FLOYD sparked historic levels of public protest and conversation about systemic racism and police conduct. Both of these events created opportunity and challenge for our local and national newsrooms and workforce as they navigated COVID-19 and unrest to deliver important stories to their communities.

"Even in the midst of the pandemic, we continued our work to transform SCRIPPS into a higher performing company focused on shareholder value creation. In mid-JULY, we announced the sale of our thriving podcast business, STITCHER, as well as of WPIX in NEW YORK, we raised our expectations for political-year ad revenue, and we significantly improved our financial profile. We were pleased to deliver second-quarter core ad revenue performance in line with our peers at 37%, if you back out the results of WPIX and the loss of their baseball game revenue. And, most recently, we were forced to go dark on the DISH NETWORK -- SCRIPPS' first distributor blackout. But despite it all, we were well positioned to weather the challenging economic environment because of strategic decisions we had made many months before.

"The sale of STITCHER came after a strategic review process that began last winter as we evaluated the changing podcasting landscape. We came to realize that STITCHER and its employees would best succeed as part of a larger, audio-focused company. Our foresight and vision for STITCHER and the podcast industry resulted in a sale that returns double our total investment in podcasting. The successful sale of STITCHER also is a strong affirmation of our national media strategy, whose paths to value creation have always included organic growth, exits and spinoffs. We remain firmly committed to our National Media strategy, to the five KATZ networks, NEWSY and TRITON, and to the promise that lies ahead in over-the-top and over-the-air television as well as digital audio.

"In addition, our financial durability has been bolstered by our commitment to improving the company's short-term operating performance as we create long-term value. More than doubling the size of our Local Media portfolio last year means our station group today is more effective, more efficient and operating with greater strength. We expanded our portfolio ahead of the opportunity we knew we would have to renegotiate 40% of our pay TV subscriber households this year. While we have secured contracts with 30% now, our blackout with DISH came before we had even begun to negotiate household rates. Unfortunately, we were left with no recourse. DISH has insisted on replacing standard contract terms with new terms distinctly off-market and in their favor. These new lines in the sand are totally unacceptable, and we hope DISH will soon begin to show concern for its customers and adopt a more reasonable position." 

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