Scripps 1Q Adjusted Local Media Rev Up 9%

E.W. Scripps Co.’s Local Media division (its TV stations and local brands on all platforms) today reported revenue for the first quarter of 2020 of $322 million, up 9% from the prior-year quarter.

(Results for the Local Media division are presented below both as reported and on an adjusted combined basis as though all of those station acquisitions had closed on Jan. 1, 2019.)

As Reported

• Revenue from Local Media was $322 million, up 58% from the prior-year quarter.
• Retransmission revenue increased 61% to $137 million. During the first quarter of 2020, Scripps renegotiated retransmission consent contracts covering just over 20% of its subscriber households. In addition, on Dec. 31, 2019, the company’s agreement with Comcast reset, covering 5.5 million households.
• Core advertising revenue increased 42% to $161 million, due to the impact of the television stations acquired from Cordillera and Nexstar/Tribune.
• First-quarter political revenue was $18.7 million during this election year, compared to $900,000 in the prior-year quarter.
• Total segment expenses increased 57% to $266 million, primarily driven by increases in programming fees tied to network affiliation agreements and the impact of the television stations acquired from Cordillera and Nexstar/Tribune.
• Segment profit was $56 million, compared to $34.2 million in the year-ago quarter.

Adjusted Combined

• Revenue: $322 million, up $26.6 million or 9%.
• Political ad revenue: $18.7 million
• Core Advertising: Decreased 8%. Weakness in economic conditions toward the end of the first quarter, reflecting the impact of the COVID-19 pandemic, slowed advertiser spending. The company estimates its core ad revenue was impacted by at least $8 million in the first quarter.
• Retransmission consent revenue: Up 21%
• Other revenue: Down 5%.
• Segment expenses: Up 8%.
• Adjusted combined segment profit: $56 million, compared to $49.1 million a year ago.

For the company as a whole, total revenue was $431 million, up from $292 million in 1Q 2019.

Net loss was $11.8 million or 15 cents per share.

Commenting on the quarter’s results, Scripps President-CEO Adam Symson said: “The year got off to an outstanding start before the impact of COVID-19 on the last two weeks of March. We saw record segment profit and margin expansion in Local Media, a doubling of the segment profit in National Media over prior year, and the company’s best first-quarter results since we spun off Scripps Networks Interactive in 2008. We view these financial results as an affirmation of the plan we have been executing that strengthens and improves the company’s operating profile.

“As the coronavirus outbreak began to spread this spring, Scripps homed in on three priorities: protecting the health and well-being of our 6,000 employees; serving our audiences and communities with news and entertainment; and maintaining business continuity and strong financial stewardship. While our second quarter will be impacted by the soft advertising environment that comes as a result of this crisis, I am confident the work we are doing now sets us up for success with our audiences and advertisers.

“Our strong relationship with our local communities was evident in March as viewers turned to our local news in record growth numbers. In some time periods, audiences grew up to 70% in one week. Because of our stations’ decades of service to their cities, Americans know they can trust us to provide locally focused, objective coverage of COVID-19 and its impact. We also created content and advertising campaigns focused on supporting local businesses and restaurants as well as information to help our audiences find job search and other resources they need in this tumultuous time.

“The acquisitions we executed in 2019 already are serving us well in weathering this economic crisis – helping us to capture more political and retransmission revenue as well as the benefits of geographic diversification. We entered this crisis delivering strong financial results, and we will persevere through it, bolstered by bigger audiences and higher brand awareness. On the other side of these challenges, we expect to benefit from the increased viewer loyalty and the business opportunity it will bring.” 

Yesterday, the company announced it’s issuing a 5 cents per share dividend on June 25.

Read the company’s report here.