Scripps Dips As Political Dough Dries Up


For The E.W. Scripps Co., there will be no future in radio. In a nod to its late January announcement that it has retained Tucson, Ariz.-based Kalil & Co. to market all of its AM and FM stations, Scripps’ Q4 radio operations results were included in the company’s “discontinued operations” as part of its fourth quarter earnings released early Wednesday.

From today, Scripps will focus on two segments, Local Media and National Media.

One of those segments suffered in Q4, thanks to a $52.8 million decline in political revenue that couldn’t be offset in other ways by Scripps.

Overall, operating revenue grew to $256.9 million, from $253 million. But, this 1.6% gain is the direct result of a huge jump in national media dollars, which moved to $53 million from $9 million in Q4.

The real story with Scripps concerns its Local Media revenue, which accounts for the bulk of profits. In Q4, Local Media dollars declined by 16.5%, to $202.6 million. Segment profit was down to $45.4 million, from $95.1 million.

Again, it was a 94% dip in political revenue to $3.4 million that appears to be the big reason why operating revenue is down. If one were to extract political from the equation, Scripps was up quarter to quarter: core advertising grew by 6.6%, to $130.2 million.

Meanwhile, a newly important income contributor — retransmission fees from MVPDs and DBS providers — grew by 4.9%, to $63.5 million.

All of these factors led Scripps to experience a steep net income decrease to $6.96 million (9 cents per share), from $38.34 million (46 cents).

Net income from continuing operations was $11.5 million (16 cents per share), sliding from $36.3 million (44 cents) in Q4 2016.

What did Wall Street think of the results? Three analysts surveyed by Zacks Investment Research expected revenue of $268.5 million, representing a big miss for Scripps.

In reaction, SSP shares as of 11:48am Eastern were off 59 cents, to $14.49.

For Scripps President/CEO Adam Symson, the company is on the right path as it refocuses its efforts on broadcast and cable TV, and on OTT offerings including its millennial-targeted Newsy all-news channel, which is adding MVPD distribution after being a strictly over-the-top offering.

He hinted that proceeds from the sale of such radio stations as WKTI-FM & WTMJ-AM in Milwaukee will help fuel “an aggressive plan to get deeper and even stronger in the markets where we operate” — TV stations, that is. The goal, he adds, is for Scripps to emerge “with a higher-performing portfolio that has more revenue and profit-generating capacity.”

So, how did Scripps’ “discontinued operations” perform in Q4? A net loss of $6 million (7 cents per share) was logged, compared to net income of $2 million (2 cents) seen in Q4 2016.

Scripps did not comment on the performance of its radio stations or indicate when station sales may be struck.