The reorganized company finds that increases in core and retrans can’t offset lower political money.
The E.W. Scripps Co. this morning reported fourth quarter revenue from its Local Media group (its TV stations and local brands on all platforms) of $203 million, down about 17% from the prior-year quarter. At the end of the quarter, radio operations were classified as held for sale, and its results are included in discontinued operations. All periods have been adjusted to reflect this presentation.
Also, since its last quarterly report, the company reorganized its businesses “to better focus on the marketplaces they serve”: a Local Media division composed of local media brands on all platforms and a National Media division made up of the businesses with national scale and reach focused on the national advertising market.
Local Media revenue broken down by category:
- Core local and national advertising was up 6.6%.
- Political was $3.4 million in the fourth quarter of 2017, compared to $56.2 million in the fourth quarter of last year.
- Retransmission consent revenue increased 4.9% to $63.5 million.
- Local Media segment expenses increased 6.5% to $157 million, driven by increases in programming fees tied to network affiliation agreements as well as the cost of producing the syndicated Pickler & Ben.
Fourth-quarter Local Media profit was $45.4 million, compared to $95.1 million in the year-ago quarter.
The company’s National Media division reported 4Q revenue was $53 million, up from $9 million in the prior-year period. Revenue from Katz, which it acquired on Oct. 2, 2017, was $41 million.
Expenses for the National Media group were $50.3 million, up from $11.2 million from the prior-year period. Excluding the impact of Katz, expenses increased 30%.
National Media profit was $2.7 million, compared to a loss of $2.2 million in the 2016 quarter.
For the company as a whole, total revenue of $257 million stayed relatively equal to the fourth quarter of 2016.
Commenting on the third-quarter results, Scripps President-CEO Adam Symson said: “Six months into our systematic work to optimize the company’s performance — and with full confidence in our path ahead — the Scripps board decided the time was right to initiate our first quarterly dividend since 2008. Their decision is a tangible show of confidence in the state of our business and our strategies for the future.
“We’ve begun to see the positive impact of our comprehensive reorganization and restructuring with cost reductions that will drive meaningful margin and cash flow improvement.
“We also continue to move forward with our television station acquisition strategy — an aggressive plan to get deeper and even stronger in the markets where we operate and emerge with a higher-performing portfolio that has more revenue and profit-generating capacity.
“And we’ve made significant progress unlocking strong growth opportunities around the future of television while improving our financial foundation. Our fast-growing Katz networks are capitalizing on the resurgence of over-the-air viewership and their 90% national household reach, and Newsy is quickly marching toward 40 million pay TV homes by the end of 2018. Both are creating compelling platforms to attract national advertising revenue.
“This work in recent months demonstrates the company’s commitment to two equally important opportunities: building near-term value through improved operating performance in our strong, stable local business and setting up our company for significant long-term value creation.”
Read the company’s report here.