TV revenues were down 24.1% in Q2 at E.W. Scripps Company, which was actually worse than the 22.1% decline for the company’s newspapers, although print ad revenues fell 29%. CEO Rich Boehne told analysts the company is determined to protect the quality of its products as others slash costs, but noted that those efforts are not yet being reflected in ad revenues.
Television station revenues were down 24% in the quarter to $61.1 million. Local was down 26% to $37.3 million. National dropped 29% to $16.9 million. With no federal election this year, political was only $333K, compared to $1.6 million a year ago. However, the “other” category, including retransmission consent revenues, rose 41% to $6.5 million.
After mentioning the bad news that automotive ad revenues fell 52% in the quarter, which was before the government’s Cash for Clunkers program, CFO Tim Stautberg noted that there are some signs of improvement in Q3. As far as Q2 was concerned, he called April and May “simply terrible,” but with some improvement in June.
Sr. VP of Television Brian Lawlor expanded on that in Q&A with an analyst. “As you noted, we’re seeing an uptick from automotive in July and carrying right now through third quarter, compared to second quarter. We do have some other categories that are pacing better than they did in second quarter as well. Services, which is our top category, has improved in the third quarter vs. second quarter. Our brand name category, which is products like P&G and Kraft and those categories, are up. Home improvement’s up, travel and leisure is up. So we are seeing growth in multiple categories beyond just automotive,” he said.
Revenues for newspapers managed solely by Scripps fell 22% to $113 million, with ad revenues down 29% to $79.4 million. Local advertising was down 28%, national 25% and classified 39%. Circulation revenues rose 2.1% to $28.6 million.
“The top priority for both the TV stations and the newspapers is increasing the amount and quality and the value of our news and information content. At a time when most competitors are whacking away at their products, we’re trying to do the exact opposite. Even in newsrooms we’re reduced compensation, but we’ve tried to protect our overall investment the product,” said CEO Boehne. “At the same time we’re focused on earning a return on those content investments by offering advertisers one of the most attractive marketplaces available across multiple platforms,” he added.
Boehne acknowledged that investors are not yet seeing the payoff from those efforts in the revenue numbers, but he is confident that the company’s increased market share will pay off when the ad market recovers.
Having recently reworked its credit facility, Scripps is celebrating increased flexibility and management has no worries about managing debt. Indeed, the company surprised Wall Street by reporting net income from continuing operations of $2.3 million, or four cents per share, compared to a low of $608 million, or $11.20 a year ago. That good news sent the stock soaring 42% for the day.