By replacing some syndicated programs with shows it effectively owns, Scripps could theoretically reduce programming costs and boost revenues while exploiting locally generated revenues.
Scripps To Swap Syndie Fare For Own Shows
E.W. Scripps’ television group expects to see its plan to replace some syndicated programming including Wheel of Fortune and Jeopardy with its own programming begin to bear fruit later this year, a company executive said during this morning’s fourth-quarter earnings conference call.
“We’ve been working on this project for two years,” Brian Lawlor, senior vice president-television, said.
While offering little detail, Lawlor noted that when the new programming would air — either as a lead-in to local evening news or to primetime programming — will depend on what time zone a particular station is in.
Scripps hired Bob Sullivan as VP-content in April 2010 to oversee “strategies for innovative local content that’s built upon journalistic excellence and strong audience engagement. Incorporating both marketing and research, he will be responsible for building successful content models for multiple distribution platforms,” the company said in a press release at the time.
By replacing some syndicated fare with programming it effectively owns, Scripps could theoretically reduce programming costs and boost revenues while exploiting locally generated revenues.
Moreover, distribution of such company-owned programming over various platforms including Internet and mobile, in addition to television, would enable the company to enhance emerging revenue streams.
Scripps will disclose more about its project in the coming weeks, a company spokesperson said.
Scripps’ acquisition of McGraw-Hill’s nine stations, including full-power stations in San Diego, Denver, Indianapolis and Bakersfield, Calif., should help the company leverage such new programming across a broader market reach.
The $212 million McGraw-Hill deal will also deliver a substantial boost to the company’s revenues for the first quarter and year, according to company projections. Aided by political, auto, services advertising, and retransmission revenues, Scripps projects revenues from its station group to increase 40% in the first quarter and 50% for the year.
Expenses for the station group will rise about 30% for the year, largely the result of the McGraw-Hill acquisition, the company projects.
On the omnipresent spectrum issue, Lawlor stressed that the company is not interested in participating in a voluntary auction. “I can tell you we’re not a seller,” he said.
With a healthy balance sheet — only $212 million debt, all from the McGraw-Hill deal, and about $128 million in cash — Scripps is, if anything, a potential buyer.
Rich Boehne, Scripps president-CEO, said the company “has four buckets for using cash.” They include share repurchase, paying down debt, investing in its digital businesses on the newspaper and television fronts and potential acquisitions.
The buy bucket would allow the company to “expand our businesses in markets where we have valuable franchises, especially in markets where we might have an opportunity to pick up a second station,” Boehne said.