While old media companies, especially those with newspapers, have been out of favor with investors, Scripps has been a Wall Street darling in recent years because of its fast-growing Scripps Networks division, with its targeted lifestyle networks and related websites. But Scripps CEO Ken Lowe told analysts yesterday it is becoming difficult for Scripps Networks to maintain its double digit growth as the cable networks reach the point of having a billion bucks in annual revenues. He says the cable nets will still deliver double digit growth for 2007, but the company's Q3 guidance was below Street expectations and Scripps stock took a hit yesterday.
Needless to say, Scripps newspapers are being hit by the same advertising softness as other print groups and its TV group has tough comps against last year's political advertising.
Q2 ad revenues for Scripps Networks rose 4.8% to 245 million, while affiliate fees rose 19% to 58.7 million. Newspaper ad revenues were down 11% to 131 million and total print revenues fell 8.9% to 166 million. TV revenues declined to 84.5 million from 86.4 million, with local up 0.3% to 54.2 million and national down 4% to 25.8 million. Political revenues were 400K, vs. 2.7 million a year ago.
Scripps expects revenues for the cable networks to be up 8-10% in Q3, TV to be down 13-16% and newspaper revenues to be down 5-8%.