With Cox Media Group‘s TV stations being shifted to a new entity with Apollo Group getting majority interest, is The E.W. Scripps Co. in a position to grow its stable of stations?
That was the first question addressed to Scripps’ President/CEO Adam Symson during the company’s Q4 2018 call by Wolfe Research analyst Marci Ryvicker.
Also confirmed during the call: Pickler & Ben is coming to an end.
Without mincing words, Symson told Ryvicker that, when it comes to mergers and acquisitions — something Scripps has hardly been shy on, as it has exited radio station ownership — “we are looking.”
In fact, the first and primary goal of Scripps is “growing the size of its local business.”
That means Scripps is on the hunt for increasing its station roster, currently at 36 TV stations in such markets as WMAR-2 in Baltimore, WPTV-5 in West Palm Beach, WEWS-5 in Cleveland and WKBW-7 in Buffalo.
“We are always optimistic, and have been looking at adjacencies, like Triton,” Symson said.
But, right now, the focus is on the station biz.
The desire to grow its broadcast TV stations further comes as DOJ approval has come for its purchase of 15 TV stations from Cordillera Communications, the company revealed, with FCC approval likely on the way soon.
The Cordillera stations include WLEX-18 in Lexington, Ky., and KOAA-5 in Colorado Springs-Pueblo, Colo., among others, and will bring Scripps’ total station count to 51.
The news that Scripps wants to purchase more stations was getting mixed reaction from investors immediately after the conference call with analysts. As of 10:15am Eastern, SSP was up 1.5% to $21.47 but trending downward after an initial spike to $22.35 just minutes after the Opening Bell.
Even so, Scripps is ahead of its 1-year Target Estimate of $19, and this could see analysts adjust their price targets upward for the company.
SUNSET ARRIVES FOR ‘PICKLER & BEN’
In January, Scripps revealed that its daytime syndicated lifestyle talk show Pickler & Ben, starring Kellie Pickler and Ben Aaron, had been renewed for a second season.
Now, it is coming to its conclusion, and Benchmark CFA/Managing Director Dan Kurnos inquired with top brass at Scripps on the company’s Q4 call regarding its decision to “sunset” the program.
The reason? Clearance issues, with several network O&Os failing to sign on for the program, ultimately created a situation where program growth was stymied.
This led Scripps to take an $8.9 million non-cash write-off of Pickler & Ben.
In May 2017, then-Scripps President/CEO Rich Boehne had high hopes for the program, which had a significant presence at NATPE Miami, the largest marketplace for syndicated programming on a global level. In fall 2017, Pickler & Ben launched in 20 Scripps markets.
The challenge? Growing beyond Scripps stations, in particular in top markets where network O&Os declined to add the program to its daytime lineup.
By November 2018, with Scripps’ release of its fiscal Q3 results, warning signs were starting to show. Local Media division expenses rose by 3.9% to $163 million in Q3. This was primarily driven by production costs associated with Pickler & Ben, which started its second season in September.
Scripps as of 1pm Eastern had not released an official statement regarding its decision to “sunset” Pickler & Ben. A company spokesperson pointed to comments Scripps President/Local Media Brian Lawlor made during the Q4 earnings call.
He said, “We launched this show back in September of 2017 and we continue to be incredibly proud of the quality of the show.”
In fact, in season two the program reaches two-thirds of TV households — totaling 176 markets.
But, that’s not good enough, it seems.
“When both NBC and ABC decided to return to the daytime talk show business, both networks committed distribution of their shows on their owned and operated stations,” Lawlor said. “That locked us out of some of the nation’s top markets. This left Pickler & Ben with no path for distribution growth into the largest U.S. cities—a path we counted on to grow the show.”
Pickler & Ben will continue through September 2019, at which point it will cease production.
“We will be very disappointed to see it end,” he said.