With strong races in Ohio, Michigan and Florida, political spending at the group’s stations reaches nearly $12 milion in the quarter. But local and core national is down, due in part to making room for campaign spots. Group predicts 11%-13% growth in 4Q.
Political candidates poured $11.7 million into Scripps TV stations in the third quarter, lifting total revenue for the 10-station group 12% over the same quarter last year to $81.7 million, the company reported this morning.
With expenses inching up just 1.5% in the quarter, profit for group soared 54% to $22.7 million.
Political spending for the quarter was slight ahead of expectations, E.W. Scripps President Ken Lowe told security analysts on a conference call this morning.
“Our stations are benefiting from the return of political advertising as campaigns for congressional seats and state offices really began to heat up,” Lowe said. “September was particularly strong as campaign got into full swing after Labor Day.
“We are blessed with market-leading TV franchises in Ohio, Michigan and Florida where there are a plethora of spirited races,” he said. “Our ABC affiliate [KNXV] in Phoenix is also benefiting from some hotly contested Arizona races.”
Bill Peterson, senior VP of the Scripps station group, dismissed concerns that political spending might weaken at Scripps’ stations in Cincinnati and Cleveland because the Republican Party is losing confidence that Ohio Senator Mike DeWine can hold his seat and is moving its money elsewhere.
“Ohio, right now, seems to remain very strong,” Peterson said.
The reported abandonment of DeWine by the national party, Peterson said, “ignores the fact that he has a huge treasure chest of money of his own. So that looks like that will remain a very, very heated campaign. We have a real strong governor’s race in Ohio as well.”
The flood of political spending masked shortfalls in other revenue. Local spot dropped nearly 1% in the quarter year-over-year to $44.7 million and core national fell 7.6% to $22 million. Scripps attributed the declines in part to the political advertising pushing out the other advertising.
With the political spending expected to continue heavy until the election day on Nov. 7, Scripps says it expects fourth-quarter revenue to be 11% to 13% greater than it was in the period last year.
E.W Scripps, which also owns newspapers and major cable networks like HGTV and Food Network, reported strong third-quarter, year-over-year revenue growth.
Consolidated revenue rose 13% to $583 million and operating income grew 24% to $138 million on the backs of the TV stations, the cable networks and the interactive division, which includes the Web search sites Shopzilla and uSwitch.
“Scripps had an excellent third quarter,” Lowe told the analysts.
Revenue from the cable networks, Scripps Networks, increased 19% year over year in the third quarter to $249 million, with ad revenue rising 18% to $192 million. Segment profit was up 32% to $116 million.
HGTV contributed $79.3 million to segment profit, up 19% from the year-ago period. HGTV revenue grew 16% to $123 million. HGTV now reaches about 91 million domestic subscribers compared with 89 million at the end of the third quarter 2005.
Food Network contributed $61.4 million to segment profit, up 37% from the third quarter last year. Food Network revenue grew 23% to $98.0 million. Food Network reaches about 91 million domestic subscribers, up from 88 million at the end of the third quarter 2005.
DIY contributed $100,000 to segment profit compared with $2.0 million in the third quarter 2005. DIY’s contribution to segment profit was lower due to the company’s decision to increase spending on original programming in preparation for the network becoming a Nielsen-rated service. Third-quarter revenue at DIY was $12.3 million compared with $11.1 million in 2005. DIY can be seen in about 39 million households, up from about 35 million a year ago.
Fine Living contributed $1.9 million to segment profit compared with a $300,000 segment loss in 2005. Fine Living revenue increased to $9.1 million from $6.4 million the previous year. Fine Living reaches about 40 million households vs. 29 million at this time a year ago.
Revenue at Great American Country was $4.8 million compared with $3.9 million in 2005. An increase in programming and marketing expenses to build viewership caused Great American Country’s contribution to segment profit to be about even with the prior-year period. Great American Country can be seen in about 44 million homes compared with 39 million a year ago.
The company said it is expecting a strong fourth quarter for the cable networks. Based on advance advertising sales, it said revenue should be up 11% to 13% year over year.
The drag on the company came from newspapers. Revenue from papers managed solely by the company fell nearly 1% to $168 million in the quarter compared to the year-ago period. And total newspaper segment profit dropped from $41.6 million to $39.7 million in the quarter. The newspaper positive: online revenue jumped 40%.