In its first-quarter conference call, the broadcaster says its looking for ways to increase its news content by re-deploying staff and partnering with other stations. It also sees new revenue opportunities in mobile and the Internet.
The economic balancing act for E.W. Scripps’ television operations: Cut costs, but not jobs, while trying to grow revenues and market share.
While most broadcasters are finding the biggest savings in job cuts, that’s exactly what Scripps is trying to avoid as it hunkers down through the tough times while preparing for better days ahead.
“Sometimes we say it makes sense to run toward the fire,” said Rich Boehne, president-CEO of Scripps, during this morning conference call on first-quarter financial results. “In many of our markets, competing stations are cutting local news programming. Instead, we’re re-deploying our people to actually increase the amount of local news content.”
With television revenues down 20 percent (see related story) Scripps, like some of its peers, is partnering with other local stations on commodity news coverage so it can free newsroom personnel for enterprise reporting. It’s also seeking to capitalize on new revenue streams from Internet and mobile video platforms.
The payoff? Still to be seen. A six percent reduction in expenses produced by salary cuts, eliminating bonuses, and stringent restrictions on travel and entertainment was more than washed out by a 12 percent increase in programming costs and pension related costs.
“Others in this space have cut expenses in television dramatically across the board,” said Barry Lucas of Gabelli & Co. “Where do you see programming costs going forward?”
Noting that barter agreements for syndicated Martha Stewart programming had expired, Brian Lawlor, senior vice president-television, said, “We made a conscious decision to move to some other programming we thought would perform better, but had a cash expense. We expect that programming increase to continue through the year. We will catch up in September but we made an investment in five markets for Dr. Oz for next year so we will have programming increases over the year.”
Scripps has one solid advantage over many broadcasters: Long-term debt of only $73 million. That translates into far lower debt service than most broadcasters and fewer restrictions on tapping revolving credit lines.
It’s also helped by solid retransmission revenues forecast to be about $9 million for the year. And there are signs that efforts to bring in new business are working: A 5 percent increase in advertisers who had either never used television or not used it in the past 12 months. In addition, advertising on station Web sites increased nearly 17 percent.