Like other media companies, E.W. Scripps Company reported a sharp decline in Q1 revenues. But while others are cutting staff, CEO Rich Boehne sees a “season of opportunity” for strong companies to prepare for better days ahead, so Scripps is redeploying to increase TV news, investing in digital platforms and spending money to examine how to change the newspaper business model.
Having just shut down the money-losing Rocky Mountain News, Boehne was asked by one analyst whether the company has any other newspapers in similar distress that might be shuttered. Boehne said “The Rocky” was the only such case. Analysts also wanted to hear more about Scripps’ project to reexamine the newspaper business model, but the CEO said it was still in its early stages. He objective, he said, is to figure out how to simplify the newspaper business.
Newspaper revenues fell 21.7% in Q1 to $122 million at Scripps, with ad revenues down 28.6% to $85.8 million.
Television revenues dropped 20.5% to $60.4 million. Local dropped 22.1% to #35.6 million, national declined 16.9% to $18.4 million and political was only $177,000, compared to $3.1 million a year ago. The automotive category dropped 46%, retail 17% and services 18% for the quarter. Meanwhile, however, the “other” line, including retransmission consent payments, shot up 41.5% to $4.2 million in Q1.
Company officials said Q2 pacings are similar to the Q1 TV results.
Like other companies, Scripps has been holding the line on expenses. Among other things, it has reduced salaries, eliminated bonuses and suspended the company match for the 401(k) plan.
“In some areas, however, we have so far protected our resources because we believe our long-term strategies for building value are more important than short-term cuts. I know it’s difficult to discern, especially by looking at our current financial performance, b ut this is a season of opportunity for those able to gain audience and revenue share in local markets. In this period Scripps is afforded a competitive advantage by its low debt and good financial flexibility. We’re not alone, but we are among the very fortunate,” Boehne to analysts and investors.
“Sometimes, we say, it makes sense to run toward the fire,” the CEO said. As examples, Boehne said while competing stations in many markets are cutting local news resources, but Scripps is redeploying its people to “increase the amount and quality” of local news content. “Additionally, we’re entering partnerships with other local stations so we can more efficiently gather commodity content and then use our talented people for enterprise reporting that builds audience,” Boehne said. He noted that the company is also investing to broaden its TV stations’ reach on the Internet and other digital platforms, including mobile DTV. “These are important new revenues streams, particularly in tough economic times,” he said.