During this morning’s earning call, the drop is blamed on Dodge, which pulled more than $1 million out of the Scripps stations in the first quarter. Looking forward, Scripps Local Media President Brian Lawlor said the outlook is bright for political advertising his year. There was no discussion on the call of the proxy fight with investor Mario Gabelli, which comes to a head on Thursday.
Auto advertising at Scripps was down by “in the mid-teens” in the first quarter, offsetting heathy growth in retail advertising and holding down total core spot revenue to less than 1%.
Scripps Local Media President Brian Lawlor, who reported the spot results on the company’s earnings call this morning, blamed it on Dodge. According to Lawlor, the division of Fiat Chrysler pulled more than $1 million out of the Scripps stations in the first quarter.
“Had that not been the case, certainly auto would have looked much better.”
The call generated no discussion of the ongoing proxy fight, in which investor Mario Gabelli, unhappy with Scripps’ performance, is trying to load the Scripps board with directors he has chosen.
The fight culminates this Thursday at the annual shareholder meeting when votes for the competing Gabelli and company board slates will be counted.
In contrast to auto, he said, retail, service and home improvement were each up 10%-12% in the quarter. Retail was up 11%, with furniture, the biggest part of the category, growing in the mid-teens.
Lawlor said that second quarter spot — core and political combined — was “pretty steady right now” with auto providing a drag just as it did in the first quarter.
Asked for the company’s long-range outlook for core, Scripps CEO Adam Symson said he expected core to track the gross domestic product or “GDP minus.”
Symson said that Scripps remains committed to its “buy-sell-swap” strategy aimed mostly at doubling up with network affiliates in markets.
The Sinclair-Tribune merger, under review by the FCC and the Justice Department, has brought some “much needed clarity” to what the regulators will allow in terms of local duopolies.
“I remain incredibly optimistic that we will be able to emerge from this period with a portfolio [of stations] that performs better as a result of some of that in-market synergy.”
He said he would expect some announcements of deals this year, but not necessarily closings.
“Obviously, I believe there is a ticking clock for our ability to execute this plan, but we are working with a high level of urgency to get after it.”
Lawlor said the outlook is bright for political advertising his year.
Some money has already come in to stations in Tennessee, Indiana, Oklahoma and Arizona — in line with the last comparable political year, 2014.
In the second half of the year, he said, the group will benefit from Senate races in Indiana, Arizona, Ohio, Tennessee and Florida. “Governor’s races in Arizona, Indiana, Ohio, Tennessee and Florida also look to be very competitive.”
Lawlor said that Scripps is on track to record around $300 million in revenue this year, despite having to reimburse cable operators for overpayments it had made.
He said that Scripps is now receiving programming fees from virtual MVPDs or OTT providers with some 350,000 subscribers. That revenue has helped offset the loss of retrans revenue from traditional MVPDs — cable and satellite operators — due to their loss of subscribers from cord cutting.
The vMVPDs are replacing only about half the money lost from the MVPDs, he said. “That has an opportunity to track maybe another 10 or 15 points up, but I don’t think at the end of the day it will be a one for one.”
Overall, money-generating vMVPD and MVPD subs declined “just over 2% in 2017,” he said.
Addressing costs, Lawlor said the “largest growing portion” of expenses is the network affiliate fee or reverse comp that Scripps pays its networks. That expense grew 5% in the first quarter and “will continue to track up every quarter,” he said.
Lawlor touted the growth of the company’s home-grown syndicated talk show Pickler & Ben. Going into its second season this fall, it will be cleared in 150 markets or more than 70% of TV homes, he said. The show also picked up three daytime Emmys, “clearly a testament to the quality of the show.”
Results from Katz Broadcasting and its four national multicast channels are also encouraging, Lawlor reported. Each now reaches more than 90% of homes. Revenue from the group was up 16%.